Other analysts have also expressed concerns over Nvidia's high valuation. Deutsche Bank maintained its "hold" rating on the stock, pointing to the already high price of the chipmaker. Nvidia also faces competition in the AI space from other chipmakers like Microsoft and Amazon. If the economy were to slow down, Nvidia's stock could be hit, particularly if customers like Microsoft reduce GPU spending. Despite these warnings, Nvidia's shares are up 86% from the start of the year.
Key takeaways:
- Three Wall Street analysts warn that Nvidia's rally in the stock market could be disrupted by waning demand and too-lofty expectations, with demand potentially falling as soon as 2026.
- Gil Luria, analyst at DA Davidson, predicts a 20% slide in Nvidia stock by the end of the year, citing concerns over the company's high valuation and the likelihood that companies investing in AI will eventually stop buying Nvidia's products.
- Deutsche Bank maintained its "hold" rating on Nvidia, pointing to the already-high price of the chipmaker, and assigned a price target of $850 a share, implying a 5% downside from the stock's current levels.
- Nvidia also faces competition in the AI space from other chipmakers like Microsoft and Amazon, and could be hit if the economy were to enter a slowdown, according to Brian Colello, an equity strategist at Morningstar.