Nvidia (NASDAQ:NVDA) shares edged up over the past week from $138 to $142 which is a small move for a usually volatile stock. In this article, we will share what the Street has been saying about NVDA stock.
Aswath Damodaran
Aswath Damodaran, NYU Stern School of Business professor of finance, thinks Nvidia (NASDAQ:NVDA) is overvalued. He explained his stance while talking with CNBC journalists and said:
“I think at this price, if you’re buying, you’re expecting the product and service market to be much bigger than people anticipate. You need to be clear that this is what you’re basing your purchase on. Even if you assume Nvidia’s dominance in the AI chip market—which I believe they currently have—and their ability to maintain these sky-high margins, you still can’t justify a $144 valuation without something additional happening. It’s almost as if you’re betting on Nvidia finding and dominating another market, and that’s a tough call.”
Like Damodaran, investment advisory Trefis Team is of the view that NVDA stock is overpriced while it trades at ~ 48x fiscal 2025 earnings estimates. The firm believes rival chipmaker AMD offers a more attractive entry point at 28 times forward earnings estimates for investors that want to jump on the AI bandwagon.
While some think the current price isn’t justified, Denmark-based Saxo Bank thinks Nvidia stock could reach $250 by the end of 2025. That would give it a $7 trillion market cap, according to Chief Macro Strategist John J. Hardy. He thinks that Nvidia is the “primary shovel-seller in the AI gold rush” and sees it accounting for 10% of the global equity market next year.
While not as bullish as Hardy, analysts at PhillipCapital also recently raised the price target on NVDA shares to $160 from $155 but downgraded the stock to Accumulate from Buy. According to PhillipCapital analyst Yik Ban Chong:
“Hyperscalers are upgrading their AI cloud capabilities to capture cloud service opportunities from Gen AI startups, H200 Hopper sales increased to ‘double-digit billions,’ the fastest product ramp in the company’s history, NVDA guided that its demand will continue at least until 2H26.”
Blackwell just started production in 4Q25, and NVDA expects its revenue to exceed their previous estimate of ‘several billion dollars.’ NVDA stated earlier that it expects supply-demand equilibrium to be reached in FY26e.”
But that’s not all, Chong also took note of the potential implications of higher trade tariffs between the U.S. and China for NVDA stock:
“The escalation of the US-China trade war starting from July 2018 caused NVDA’s stock price to fall more than 50% from its peak in October 2018. If similar tariff policies were to be imposed again, there may be a material impact on NVDA’s share price.”
The impact of higher trade tariffs could present challenges for Nvidia, but what about a structural change in AI? Adam Clark, a reporter at Barron’s, shared a unique perspective about a paradigm shift in AI that could impact the business of Wall Street’s AI darling. AI companies are shifting their focus from developing and training large models to inferencing. Nvidia’s GPUs are more appropriate for the training part of model development, and Clark reported that inferencing might bring more business to the company’s competitors including AMD (NASDAQ:AMD) and Intel (NASDAQ:INTC).
Our research director also shared his views on NVDA’s earnings results here. He thinks NVDA stock can reach $170 within 3 months. While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Hedge Fund Resource Center