Chip Demand Could Be Slowing, but Does That Make Nvidia Stock a Sell?

Group 1 - Nvidia has seen significant stock gains in 2023 and 2024 due to its leadership in the AI accelerator industry, primarily driven by its role in ChatGPT [1] - The company's products now generate nearly all of its revenue, highlighting its dominance in the AI market [1] - Recent developments, including the DeepSeek breakthrough and signs of falling demand, have raised concerns about Nvidia's near-term stock performance [2][3] Group 2 - Nvidia's revenue increased by 114% in the fiscal year, but the sales outlook for Q1 2026 indicates a deceleration to 65% growth, suggesting potential overvaluation with a P/E ratio of 36 and a price-to-book ratio of 33 [5] - Despite challenges, the AI chip market is projected to grow at a CAGR of 29% through 2030, indicating long-term demand for Nvidia's products [6] - Nvidia maintains an 85% market share in advanced AI chips, making it difficult for competitors to challenge its position [7] Group 3 - Competitors must not only match Nvidia's current technology but also prepare for its next-generation chip, Rubin, expected in 2026, which reinforces Nvidia's leading edge [8] - Although revenue growth is expected to slow, net income is likely to continue growing, supported by a forward P/E of 24 [9] - The overall sentiment suggests that Nvidia's stock is more likely a hold than a sell, as long-term growth prospects remain strong despite short-term challenges [10][11]