Top Investor Warns: ’Trouble Lurking’ for Nvidia Stock in 2025
Nvidia's AI dominance faces mounting skepticism as institutional investors sound alarm bells.
Market Reality Check
Wall Street's darling might be heading for a reckoning. Despite crushing earnings quarter after quarter, whispers of unsustainable valuations grow louder. The chip giant's relentless rally shows cracks—supply chain bottlenecks, increased competition, and that pesky little thing called market saturation.
Expert Warning Signs
One top fund manager puts it bluntly: 'The math doesn't add up anymore.' They point to stretched multiples and whisper numbers that would make even the most bullish analyst blush. When institutions start hedging, retail investors should pay attention—or learn another expensive lesson about chasing momentum.
Tech Sector Ripple Effects
What hurts Nvidia doesn't stay with Nvidia. The entire semiconductor ecosystem feels the tremors when the market leader stumbles. Partners, suppliers, and even those crypto miners still clinging to GPU farms brace for impact. Because on Wall Street, today's high-flyer becomes tomorrow's tax write-off faster than you can say 'market correction.'
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Nvidia has earned its top perch by dominating the data center market, supplying the hardware that has helped to turn AI dreams into reality. While the company’s revenue growth is starting to come down from the triple-digit figures of quarters past, Nvidia continues to deliver solid sales and earnings numbers.
For instance, in its most recent Q2 Fiscal 2026 quarterly report, Nvidia enjoyed record-breaking revenues of $46.7 billion – up 56% year-over-year – along with a GAAP gross margin of 72.4%. The company is guiding for (yet) more growth up ahead, expecting $54 billion (plus or minus 2%) in Q3 – a figure that does not include any H20 shipments to China.
While things have certainly been swell, top investor James Foord spots some trouble lurking on the horizon.
“With NVDA stock still priced for perfection, even modest revenue hits or margin compression could spark a major selloff,” worries the 5-star investor, who is among the top 2% of investors covered by TipRanks.
The China issue is particularly concerning for Foord, who notes that the company has recently accused Nvidia of violating anti-trust laws. This comes on the heels of the 15% export tax that the company must pay the U.S. Treasury on sales to China, along with efforts by the Chinese government to discourage domestic firms from purchasing Nvidia’s wares.
Foord wouldn’t be surprised if China exports do resume for the Q3 period, however, he does worry that these might not surpass the otherworldly expectations the market has for Nvidia.
“Could Nvidia’s next earnings be the first miss since the AI cycle started?,” he wonders.
Moreover, the investor points out that AMD is offering high-performing chips that rival those of Nvidia – and at cheaper prices. This could very well begin to pressure Nvidia’s margins going forward.
Though he also thinks that NVDA’s share price could MOVE higher still, Foord is electing to look for greener pastures elsewhere.
“Nvidia’s dominance isn’t disappearing overnight, but the dual risks of China headwinds and AMD’s momentum create a much less comfortable setup for shareholders,” sums up Foord, who is rating NVDA a Sell. (To watch Foord’s track record, click here)
Foord’s view is not exactly a popular one on Wall Street. With 35 Buys far outshining 2 Holds and 1 Sell, NVDA cruises to a Strong Buy consensus rating. Its 12-month average price target of $211.36 implies gains approaching 25% in the year ahead. (See)
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