Why Nvidia Stock Is Down Today
What happened
Shares of Nvidia (NASDAQ: NVDA) were sliding this morning, likely based on comments an analyst made about Nvidia and as the Federal Reserve is poised to raise interest rates at its meeting today.
The tech stock was down by 3.3% as of 12:09 p.m. ET.
So what
Late yesterday Morgan Stanley analyst Joseph Moore resumed coverage of Nvidia with an equal weight rating on the stock. And while he's optimistic about the company and has a $217 price target on Nvidia's shares, he's also concerned that the gaming market could slow down.
Image source: Getty Images.
Moore thinks that there could be "significant deceleration" in gaming that could create a "modestly challenging" 2023 for the company, according to TheFly.com.
Nvidia's gaming revenue is the company's largest sales segment, so it makes sense that investors would focus their attention on an analyst's comments about the company's gaming revenue.
Adding to some Nvidia investors' worries this morning is the fact that the Federal Reserve is meeting today and tomorrow to decide about issuing an interest rate hike.
The Fed is trying to tamp down inflation that's currently at a 40-year high and investors are bracing themselves for a potentially aggressive 50-basis point hike.
With interest rates on the rise, the economy could begin slowing down and could potentially inhibit how quickly some companies like Nvidia will grow.
Now what
Investors will get a clearer picture of how Nvidia is doing when the company reports its first-quarter results on May 25.
But with the broader market focused on sky-high inflation and how the Fed will respond to it, Nvidia investors may want to prepare for more instability from the stock.
Nvidia will likely still be a good long-term investment, but the stock market's current volatility is no doubt testing the patience of some Nvidia shareholders.
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Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
