NVDA Receives a Rare Sell Rating From Analyst

Jay Goldberg, a senior analyst at Seaport Research, initiated coverage of Nvidia (NVDA) stock with a Sell rating last week.

According to Goldberg, who spoke with Yahoo Finance, “the good news is fully priced into Nvidia,” while the company faces worrisome potential negative catalysts.

The Good News Is Priced In, But the Potential Bad News Isn’t

Since NVDA’s new Blackwell chips are already sold out for this year and the company cannot produce enough chips to meet demand, the firm will have difficulty beating analysts’ average estimates, Goldberg believes.

On the other hand, investors “should be concerned about” potential negative catalysts that the firm is facing, the analyst stated.

“Semiconductors are cyclical, and it’s important to remember that,” Goldberg added.

China Issues and Potential Spending Slowdowns

“China would like to buy more of Nvidia’s chips,” but the tech giant will have a difficult time selling its products to the Asian country, due to geopolitical issues, Goldberg warned.

Meanwhile, starting next year, the spending on NVDA’s chips by the large cloud infrastructure may be “paused” or at least “slowed,” according to the analyst.

Goldberg holds that view because he has learned that the cloud firms’ financial teams “are starting to ask questions” about the firms’ spending on AI.

“Their CFOs could start asking” about the return on investment of the AI spending, he said.

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Disclosure: None. This article is originally published at Insider Monkey.