Nvidia (NASDAQ:NVDA) has seen remarkable growth over the past year, and its latest earnings report highlighted record-breaking quarterly revenue along with solid guidance. However, despite these strong results, the AI chipmaker’s stock has faced some volatility. The fluctuations seem to stem from slowing quarter-over-quarter growth, delays in NVDA’s Blackwell chips, and overall market volatility.
Now, with shares down 7% since the earnings call, does this dip present a buying opportunity? Investor David Ksir remains skeptical that this is the best move.
“Despite an indisputable competitive advantage, from a historical perspective it’s extremely unlikely that Nvidia would be able to maintain the high growth and high margin trajectory it has been on,” the 5-star investor opined.
While Ksir recognizes the ongoing boom in AI, he remains unconvinced that this will lead NVDA to the substantial profits investors have come to expect.
Moreover, the investor thinks technology stocks may be on the cusp of a downward spiral, even approaching the drops of the dot-com bubble over two decades ago.
“I worry that investors may have got ahead of themselves (again),” writes Ksir, adding that “back then, companies were also very heavily investing in new Internet infrastructure and investors drove valuations to very high levels ahead of rapid earnings growth.”
For Nvidia, this could lead to a rocky patch, especially since Ksir does not see a realistic plan for big tech companies to monetize AI technology.
“Nvidia has around a 90% share of the AI-chip market, which means that it is unlikely to capture further share of the market and is therefore unlikely to grow by more than the market itself,” writes Ksir.
Given these concerns and the potential for significant downside, Ksir rates NVDA shares a Sell. (To watch Ksir’s track record, click here)
In contrast, Wall Street analysts have a far more bullish view of Nvidia. Over the past 3 months, the stock has received 39 Buy recommendations and 3 Holds, resulting in a consensus rating of Strong Buy. With a 12-month price target of $153.24, analysts project potential gains of 31%. (See NVDA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
