Nvidia (NVDA) is pulling back 1% today after Morningstar called the stock "fairly valued," and two technical analysts made cautious comments about the shares in statements to Yahoo Finance.

Morningstar Says NVDA Is "Fairly Valued"

In an article published yesterday afternoon, research firm Morningstar kept a $130 fair value estimate on NVDA in the wake of its fourth-quarter earnings. However, it also wrote that the "shares appear fairly valued to us."

Morningstar believes that NVDA's current level accurately reflects the huge potential of the company's AI chips and the possibility that the demand for those semiconductors will slow starting in 2026.

Morningstar expects the company's revenue growth to slow to 21% during its next fiscal year.

Technical Analysts Are Fairly Bearish on NVDA

Noting that the shares had fallen below their 200-day moving average, Todd Sohn, senior ETF and technical strategist at Strategas Securities LLC, told Yahoo Finance that "On a tactical basis, it’s hard to remain super bullish on a name once the 200-day starts to crest and slope downward.”

“I’m inclined to think there’s more to go on the downside. We could see support anywhere from here to $110, but below that my minimum downside target is in the $107-$103 range," added Rick Bensignor, CEO of Bensignor Investment Strategies and a former Morgan Stanley strategist.

While we acknowledge the potential of NVDA, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.