Nvidia (NASDAQ:NVDA) has been one of the top-performing stocks of 2023, skyrocketing around 135% year-to-date. However, recent weeks have seen a 17.4% dip from its 52-week high of $140.76. Investors are now wondering whether Nvidia’s stock rally has ended or if this is a temporary pullback. This Nvidia stock forecast explores the current situation and future prospects of the AI leader, focusing on recent margin pressures and its potential for long-term growth.

Short-Term Margin Pressures Affecting Nvidia Stock

In the second quarter of 2023, Nvidia’s gross margins took a slight hit, falling to 75.7% due to several factors, including a higher mix of new products in its data center segment and inventory provisions related to low-yield Blackwell materials. Nvidia expects margins to hover between 74.4% and 75% in the upcoming quarters, as its product mix continues to evolve.

While this margin pressure has raised concerns, it is important to note that these are temporary setbacks. Nvidia is ramping up production of its newer products, such as the Blackwell platform, and as it scales, costs should stabilize, returning the company to more consistent profitability.

Blackwell Delays: A Short-Term Issue for Nvidia

Another concern affecting the Nvidia stock forecast is the delay in the launch of its highly anticipated Blackwell chip. This delay has limited Nvidia’s revenue growth in the short term, but it appears the worst is behind the company. Nvidia has started ramping up Blackwell production and plans to begin shipping the chip in Q4 of 2023, with plans to scale throughout 2024 and 2025.

The Blackwell platform is expected to meet strong demand, which should significantly boost Nvidia’s revenue in the coming quarters. Additionally, the company’s Hopper platform, which is already in the market, continues to see strong demand, further supporting Nvidia’s growth story into 2025.

Nvidia’s Strong Product Demand Fuels Long-Term Growth

The recent pullback in Nvidia’s stock price has not dampened long-term growth expectations. Demand for its key products, including Hopper, Blackwell, GPU computing, and networking platforms, continues to soar. Nvidia has positioned itself as a leader in the artificial intelligence (AI) space, and its products are integral to the AI infrastructure of cloud service providers (CSPs), consumer internet companies, and enterprises alike.

The Nvidia stock forecast remains optimistic, particularly with the company’s increased production of its Hopper architecture and new H200 platform. Nvidia began shipments of the H200 platform in Q2, targeting CSPs and other large enterprises. Demand for Hopper is expected to rise significantly in the second half of 2024, thanks to better supply chain availability.

Moreover, Nvidia’s upcoming Blackwell platform is forecast to generate billions of dollars in revenue in Q4 alone. With demand already exceeding supply, this platform is set to contribute significantly to Nvidia’s future financials.

Networking and Gaming Segments Show Promise

While Nvidia’s AI business garners the most attention, its networking and gaming divisions are also performing well. The company’s Spectrum-X AI-focused Ethernet platform doubled its revenue in Q2, with hundreds of customers adopting the technology. Nvidia plans to release new Spectrum-X products annually to meet growing demand, potentially turning this platform into a multi-billion-dollar product line within a year.

Nvidia’s gaming segment also remains a consistent revenue driver, with strong demand for gaming products and healthy channel inventory supporting growth in this area.

Analysts Remain Bullish on Nvidia Stock

Despite the recent slowdown, Wall Street analysts continue to see strong upside potential for Nvidia. According to 40 analysts covering the stock, the consensus remains a “Strong Buy,” with an average price target of $149.46 — a 28.6% upside from current levels. Analysts cite Nvidia’s dominance in the AI space, robust demand for its GPUs, and future growth from the Blackwell platform as key reasons for their optimism.

Conclusion: Is Nvidia Stock a Buy?

The recent dip in Nvidia stock may concern some investors, but the company’s underlying fundamentals remain solid. The Nvidia stock forecast suggests that short-term margin pressures and product delays are likely temporary, with strong demand for AI platforms and networking solutions expected to drive growth in the coming years.

Nvidia is well-positioned to continue leading the AI revolution, making this dip a potential buying opportunity for investors looking to capitalize on long-term growth. With new product launches on the horizon and expanding market opportunities, Nvidia’s stock could resume its upward trajectory in the near future.

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