Once-bullish analyst calls for 42 percent plunge in the market’s hottest stock

The past few days have been a roller-coaster ride for Nvidia shareholders. Of course, they have little to complain about, given that the past year has been like a trip to the amusement park.

On Friday morning, shares of the semiconductor company rose to a record high of $168.50. At that point, the stock had climbed by some 250 percent over the past year. The move came after Citi research analyst Atif Malik boosted his price target to $180 from $145 (additionally outlining a "bull case" whereby the stock could rise to $300) and UBS analyst Stephen Chin upped his target to $168 from $148.

After hitting record levels in the first half hour of trade, the stock began to slide, attended by a short and somewhat disjointed report from short seller Andrew Left's firm Citron Research, which contended that Nvidia is an overvalued "casino" stock that would soon fall back to $130.

As high-flying tech names in general slid meaningfully, Nvidia dropped as low as $142.75 on Friday afternoon (a 17 percent intraday decline) before closing a bit off of the lows.

On Monday, the stock opened lower still, before beating a rebound to finish the day with a mild gain. And on Tuesday, the stock was vacillating around breakeven.

Wall Street research analysts appear to be sharply divided on the stock. Just about half of them have bullish ratings on Nvidia, while 13 percent have bearish ratings; the rest have it at hold.

One of the more bearish analysts is Romit Shah of Nomura Instinet, who has a reduce rating and a price target of $90.

Shah hasn't always been so skeptical about the stock; he called it a buy in November, and cut his rating to reduce in February, at which point he dropped his price target to $90 from $100.

At the time, that implied a 19 percent drop; as on Tuesday's opening price, a fall to $90 would represent a 42 percent decline.

"The valuation is pretty astronomical," Shah said in a Monday interview on CNBC's "Power Lunch."

"It's a semiconductor which is being valued as a software company, which it's not," Shah said. "The best businesses in the space trade at six times revenue, and Nvidia is trading at around 12 times, and fueling that is a lot of hype and hope around artificial intelligence."

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Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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