What happened
What comes up must come down, as the old saying goes, and that rule of gravity applied to Nvidia (NVDA -10.01%) stock on Wednesday. The days-long rally in the tech company's shares, fueled by its involvement in artificial intelligence (AI), fizzled out as investors apparently engaged in some profit-taking and an analyst published a new note about it that contained a few items of concern.
So what
On Wednesday morning, Citigroup prognosticator Atif Malik reiterated his buy recommendation on Nvidia stock and his $420 per share price target.
Although Malik remains a resolute Nvidia bull, his note did point out some potential areas of vulnerability for the graphics card specialist's business, citing first-quarter data compiled by Mercury Research. In terms of its foundational graphics processing unit (GPU) sales, Nvidia's market share (in terms of revenue) during the period actually slipped quarter-over-quarter in categories such as data center and desktop.
The declines were hardly drastic, and the company remains a powerful presence in all categories. In the data center category, for example, its revenue share dipped by less than 1 percentage point, to 97%; desktop fell by 2.6 percentage points from the fourth quarter to land at 83.8%.
Now what
Still, that was enough to help stall the rally in Nvidia shares. That was likely bound to happen anyway, as any sharp and sudden rising trend in a company's stock price usually ends quickly (and often as sharply) as traders book their profits. Meanwhile, Malik's latest take on the tech company highlighted many positive factors that will continue to support the buy case, and investor sentiment around it remains generally bullish.
