NVIDIA Corporation (NASDAQ:NVDA)’s “current stock price balances the bull case and the bear case,” Gil Luria, a stock analyst at investment bank DA Davidson, recently stated on CNBC.
Nvidia could be hurt by an erosion of its revenue from both China and the large cloud-infrastructure players, according to Luria, who has a Hold rating on the stock.
NVIDIA Corporation (NASDAQ:NVDA) Is Facing Two Major Threats, Luria Warns
“At least” 25% of NVIDIA Corporation’s chips ultimately end up being used by Chinese entities, Luria reported.
With Washington looking to restrict China’s use of AI chips, NVDA’s China business is likely to weaken, undermining its shares, the analyst indicated.
Meanwhile, the major cloud players are raising funds at high interest rates in order to buy NVDA’s AI chips, Luria said.
If the growth of NVDA’s revenue from China and the cloud players slow, analysts’ estimates for NVIDIA Corporation could drop, the analyst warned.
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This article is originally published at Insider Monkey.
