Nvidia Gets A Rare ‘Sell’ Rating On Wall Street: Analyst Says Stock Might ‘Underperform Relative To Peers’

Seaport Research analyst Jay Goldberg argued that Nvidia is one of the leading beneficiaries of the current AI spending boom, but its prospects are "well understood and largely priced into the stock."

Shares of chipmaker Nvidia Corp (NVDA) traded 3% lower on Wednesday after Seaport Research analyst Jay Goldberg initiated coverage of the company with a rare ‘Sell’ rating.

The brokerage set a $100 price target on the stock, representing an 8% downside from its closing price of $109.2 on Tuesday.

Nvidia is one of the leading beneficiaries of the current AI spending boom, but its prospects are "well understood and largely priced into the stock," the analyst argued, as per TheFly.

With upside appearing "fully understood," the bias is towards the downside with concerns about geopolitics, supply chain missteps, deployment delays, and growing scrutiny of AI spending by customers, the analyst told investors.

“AI may do well this year, but NVDA is likely to underperform relative to peers,” the analyst said, as reported by CNBC.

The brokerage also flagged mounting competition.

“[There’s] strong momentum behind hyperscalers’ internal Nvidia alternatives – Nvidia’s largest customers are all looking to design their own chips,” the analyst said, as per the report.

A ‘Sell’ rating is a rarity for Nvidia. According to data from Koyfin, of the 62 analysts covering Nvidia tracked by the platform, 12 have rated it a ‘Strong Buy’, 43 have given it a ‘Buy’ rating, while seven rate it a ‘Hold.’

The 12-month average target for the stock is at $164.29, representing over 50% upside from its current value.

NVDA stock is down by about 23% this year, but up by about 23% over the past 12 months.

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