Nvidia (NVDA) Stock: The Rotation That Has Wall Street Worried

TLDR

• Nvidia shares have stalled near August 2025 levels despite Wednesday’s 3% rally, trading sideways for five months
• Money managers are rotating into smaller AI stocks like Micron and Applied Materials while Intel leads chip sector gains
• UBS says Nvidia’s massive market cap makes it difficult for institutional investors to add more shares to portfolios
• Analysts remain bullish with KeyBanc’s $275 target based on 24x fiscal 2027 P/E versus 30x historical average
• Jensen Huang pitched Europe’s robotics opportunity at Davos, citing manufacturing expertise and physical AI potential

Nvidia closed Wednesday up 3% but that doesn’t tell the full story. The stock remains stuck at the same price it traded five months ago in August.

NVIDIA Corporation, NVDA

After-hours trading added just 0.3% Wednesday. For a stock that defined the AI boom, the flat performance stands out.

Investors are chasing different opportunities. Micron Technology has captured attention in memory chips. Applied Materials is gaining ground as a semiconductor equipment play. Intel has become the chip sector’s surprise winner on turnaround hopes.

UBS analyst Timothy Arcuri laid out the problem. Nvidia and other AI leaders have grown so large they now represent huge chunks of major indexes. That makes it tough for fund managers to keep adding shares without creating concentration risk.

The Roundhill Magnificent Seven ETF hit its lowest level versus the S&P 500 since early September on Wednesday. That index tracks Nvidia and other megacap tech names on an equal-weighted basis.

Analysts Still See Upside

Wall Street isn’t giving up on Nvidia. KeyBanc analyst John Vinh kept his $275 price target and Overweight rating intact this week.

The valuation case looks compelling. Nvidia trades at 24 times fiscal 2027 earnings forecasts. Its three-year median sits around 30 times, making current levels look cheap.

The analyst consensus backs that view. Out of 41 analysts, 39 rate Nvidia a Buy. Only one says Hold and one recommends Sell.

The average Wall Street price target lands at $263.44. That implies 43.7% gains from here.

Huang’s European Robotics Pitch

CEO Jensen Huang made headlines at the World Economic Forum in Davos. He told European leaders they have a “once-in-a-generation” shot at robotics leadership.

Huang’s pitch centers on Europe’s manufacturing legacy. The region can skip software-first development and jump straight to “physical AI” by merging industrial know-how with modern artificial intelligence.

Siemens, Mercedes-Benz, Volvo, and Schaeffler are already moving. These European giants are pouring money into robotics and AI-powered manufacturing.

Competition is heating up globally. Elon Musk claims 80% of Tesla’s future value will come from Optimus humanoid robots. Google’s DeepMind keeps releasing robotics AI models. Nvidia itself partners with Alphabet on physical AI projects.

Huang warned Europe about two roadblocks. Energy costs run high and power supply remains limited. Without fixing those issues, he said Europe will struggle to build the AI infrastructure robotics demands.

He pushed policymakers to expand energy capacity for data centers and AI factories.

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