Nvidia's Risk-Reward Proposition Is Much Less Favorable, According to 1 Wall Street Analyst

Core Viewpoint - Nvidia's growth may be slowing down as supply of GPUs catches up with demand, leading to a downgrade from buy to hold by an analyst [1][2]. Group 1: Analyst Insights - Analyst Kinngai Chan expects Nvidia to continue beating consensus estimates in future earnings, particularly after strong fiscal 2025 Q4 results [2]. - Concerns arise that Nvidia's growth could decelerate into the second half of fiscal year 2026 as GPU supply aligns with industry demand [2]. - There is an anticipated larger contraction in margins due to increased production of next-generation Blackwell chips [2]. Group 2: Competitive Landscape - The emergence of DeepSeek, an AI chatbot developed at a lower cost than competitors like ChatGPT, raises concerns about Nvidia's long-term market position [2]. - More efficient AI training methods and the ability to create AI programs with less advanced computing resources may negatively impact Nvidia in the medium to long term [2]. Group 3: Market Risks - Potential near-term risks include the Trump administration's possible implementation of stricter export controls on chips, which could affect Nvidia and other major AI stocks [3].