The nine-day RSI got to well over 70 then headed lower. NVDA stock reached overbought conditions before finally weakening the past several days. My downside short-term price target is $315. While longer term Nvidia may indeed head much higher, I feel the path of least resistance shorter term is lower. McCall and staff also note similar valuations concerns as well, but ultimately dismiss them from their longer-term investment outlook.Īs a shorter-term trader, however, I think these concerns are being reflected in the recent price action in NVDA stock. They highlight all the reasons to like NVDA stock for the long term, which I actually tend to agree with. Matt McCall and the InvestorPlace research staff published an outstanding analysis on NVDA on May 26. It will be difficult for Nvidia to maintain the growth needed to justify such lofty valuations. NVDA has a P/E of over 45x, even on a forward basis. Other valuation metrics, such as P/E and Price/Book, at a similar extremes. This is by far the richest multiple in the past five years and well above the five-year average of roughly 10x. NVDA stock now trades at a Price/Sales multiple that exceeds 18. Nvidia is certainly not cheap from a valuation perspective. Look for NVDA stock to continue to struggle over the coming weeks as the momentum melt up fades. Once the upside momentum failed to take shares higher, the sellers stepped in. This is a perfect example of the news already being more than priced into the stock.

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