Highlights
On Friday, the Nvidia stock price continued with further decline dropping over 4% to $102.83. Over the past week, the Nvidia shares have fallen by 14%, dragging the broader U.S. tech sector down with it. Fundstrat analyst Tom Lee suggests this may be a good buying opportunity following the dip. The crypto market has also responded to the tech sell-off, with Bitcoin and altcoins experiencing significant corrections.
Appearing during CNBC’s Closing Bell hours on Friday, Fundstrat analyst Tom Lee stated that the Nvidia stock rout could be ending very soon. The CNBC host stated that Nvidia valuations have skyrocketed over the past year and more, and there’s too much “priced in” this stock.
Responding to this, Tom Lee said that in the 10-year history of Nvidia, the NVDA share has seen 30% drawdowns nearly eight times. He said that the Nvidia stock PE was actually higher after the previous drawdowns and this time, it’s comfortably around the mid-20s. Lee views this as just a normal profit booking adding that it might take the share price down to the 90s, however, this is a good buying opportunity with a four-year horizon.
Tom Lee is not alone in setting the bull case scenario for the chipmaker. Bank of America has also shared the Nvidia stock target of $165 which could also stage a strong recovery in several AI coins and the broader crypto market.
Over the last week, the chipmaker saw $406 billion eroded from its market cap with the DOJ initiating an anti-trust probe. However, Nvidia debunked the DOJ’s subpoena adding that they would be ready to work with the regulator in the case of future queries.
In the last 30 days, the Nvidia stock has seen wild swings between $90 to $130. This has been the worst two-week stretch in the last two years for the NVDA share. This volatility in the share price has made the Bitcoin price volatility look smaller.
Of course, the Bitcoin price has been reacting to NVDA share swings, down 9% on the weekly charts, with analysts predicting the BTC price drop to $49,000. Several AI coins have also dropped 15% on the weekly chart in tune with the NVDA share drop.
Thus, a recovery in Nvidia could also trigger a similar bounceback in Bitcoin and the broader crypto market. It will be interesting to see whether there’s more pain left in September before a strong recovery. As shown by Rekt Capital, the Bitcoin price has already corrected more than the average September month corrections in the halving year.
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