Shares of Nvidia Corp. fell Friday, after Wedbush analyst Matt Bryson said while he remains bullish on the semiconductor maker, the stock has run up too high for him to keep recommending investors buy.

The stock
NVDA,
+0.36%

has soared 51.5% over the past three months , while the PHLX Semiconductor Index
SOX,
+1.01%

has advanced 14.1% and the S&P 500 index
SPX,
+0.66%

has tacked on 4.5%, as the company is viewed as a key beneficiary of the build out of the “metaverse.”

That rally has propelled Nvidia to be the seventh-most valuable U.S. company with a market capitalization of $759.75 billion as of Thursday’s closing price.

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The stock slipped 0.8% in morning trading Friday.

Wedbush’s Bryson downgraded the stock to neutral, after being at outperform for at least the past 2 1/2 years.

“While typically we would want to tie a rating change to some sort of negative catalyst, frankly there is none,” Bryson wrote in a note to clients.

He said conditions rather “have only improved” for the company over the past three months.

FactSet, MarketWatch

The downgrade comes less than a week before Nvidia is scheduled to report fiscal third-quarter results, after the Nov. 17 closing bell. Analysts surveyed by FactSet are expecting, on average, per-share profit to rise 52% to $1.11 and revenue to grow 44% to a record $6.8 billion. The company has beat both profit and revenue expectations every quarter for at least the past five years, according to FactSet data.

“We believe the combination of unprecedented demand (particularly this late in the course of product cycles) for both data center and client offerings will allow [Nvidia] to again exceed expectations next week when they report numbers, and we expect the company will provide constructive guidance ahead of prior Street views,” Bryson wrote.

He raised his stock price target to $300 from $220, but the new target implied about 0.5% downside from current levels. For Wedbush, an outperform rating means the analyst expects the total return of the stock to outperform relative to the median total return of the companies they cover over the next six to 12 months.

“[W]hile we remain very bullish on both [Nvidia’s] near-term prospects and longer-term opportunities (particularly around AI), we simply find ourselves unable to justify lifting our multiple to levels that would continue to justify an outperform,” Bryson wrote, and therefore the downgrade to neutral.

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