Credit: Shutterstock photoShares of Nvidia Corporation NVDA fell more than 7% from their intraday peak, slumping nearly 2.5% from yesterday's closing price, after the company was called out by notorious short-seller Citron Research on Friday.
The buzz began when Citron's Andrew Left, who rose to fame after successfully betting against companies like Valeant Pharmaceuticals VRX , tweeted that NVDA was headed back down to $130:
The tweet links to the Citron Research website, where a report entitled "NVIDIA: The Moment that Separates the Gamblers from the Investors" was posted earlier today. In the post, Citron reminded investors that the firm has been a long-time supporter of Nvidia, but suggested that the stock's latest rally has gone too far.
"In the recent frenzy in NVIDIA shares, it has added more to its market cap than the total valuation of its competitor AMD. Now it is fueled by an irresponsibly bullish number from Citi," the note said. "Just seven months ago, their analyst team had a $90 price target. But yesterday, their target is doubled $180 ... despite the weakness in NVDA's core gaming business."
If NVDA were to slip back to $130, it would represent a decline of nearly 20% for the stock. On the other hand, Citi's bullish $180 price target calls for shares to gain another 13%.
Citron's note did point out that the company supported Nvidia about two years ago when investors were clambering over Ambarella AMBA . AMBA shares have tanked more than 55% since Citron made its bearish call in 2015.
Of course, Citron and Left are not always correct. Notably, the firm is losing on its bearish view of online furniture retailer Wayfair W , which has gained more than 100% this year.
NVDA has been one of the hottest stocks on Wall Street this year. Shares are up nearly 40% so far, outpacing the S&P 500's 8% gain. Over the past 52 weeks, NVDA has soared more than 235%.
Nevertheless, NVDA remains a Zacks Rank #3 (Hold).
Interested in the week's other top stories? Make sure to check out the latest episode of the Zacks Friday Finish Line podcast. This week's stories include James Comey's testimony, AMD's (AMD) recent surge, and Uber's nightmarish PR disaster:
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
