HSBC's Frank Lee downgraded Nvidia's stock from "buy" to "hold," citing concerns over the company's ability to sustain its growth. Lee pointed out that Nvidia's pricing power, previously strong due to its dominance in the GPU market, may diminish as the company has not increased average selling prices. He also mentioned that Nvidia's recent earnings and guidance beats have been shrinking, partly due to uncertainties surrounding its Blackwell supply chain ramp-up.
Key takeaways:
- Nvidia's stock fell 7.8% on Thursday due to new tariffs and a downgrade by a major bank.
- President Donald Trump's reciprocal tariffs announcement led to a 6.6% drop in Nvidia's shares during pre-market trading.
- Altimeter Capital CEO Brad Gerstner believes Nvidia will perform well despite tariffs, as semiconductors are exempted due to the global AI race.
- HSBC analyst Frank Lee downgraded Nvidia's stock from "buy" to "hold," citing concerns over its future pricing power and shrinking earnings beats.