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Why Nvidia Stock Dropped Back Today

By Rich Smith – Jan 7, 2022 at 1:43PM

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Citi sees catalysts -- but investors remain unconvinced.

What happened

Up again, down again semiconductor stock Nvidia (NVDA 0.67%) is... down again in Friday afternoon trading, falling 2.9% through 12:45 p.m. ET.

After dropping along with the rest of the tech sector early in the week, Nvidia shares perked up briefly yesterday after Bank of America named Nvidia a "top compute pick" for 2022. The selling resumed today, however, despite some positive commentary from Citigroup.

Chalkboard drawing of stock chart arrow going up being erased and pointing back down.

Image source: Getty Images.

So what

Nvidia has benefited from a "strong holiday gaming season," explained Citigroup in a note covered today on, as well as from "solid data center demand trends." Although the global semiconductor shortage continues to weigh on sales volumes, Citi thinks that "gaming/networking foundry supply [will] improve in 2H this year," helping to boost revenues.

Now what

CES 2022 is winding down now and, if truth be told, none of Nvidia's new product announcements there really helped the stock out very much. Nevertheless, Citigroup is already looking forward to the Nvidia GPU Technology Conference in March as a potential "catalyst" that could lift the stock, predicting the company might release details on "Ada Lovelace 5 nm products" there.

Alternatively, there could be more details on the 5 nm products coming in Nvidia's upcoming Feb. 22 earnings report. That -- or the earnings numbers themselves -- could also become catalysts to set off a new bull run in Nvidia stock, argues the analyst.  

Ultimately, Citi believes that after more than doubling in price last year, Nvidia shares could still tack on another 27% or so this year as the stock races toward Citi's price target of $350 a share. Regardless, with every catalyst the analyst could come up with being weeks or months away, it seems investors feel no immediate need to bet on Nvidia stock again today.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns and recommends Nvidia. The Motley Fool has a disclosure policy.

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