Prediction: Nvidia Just Received Its First Wall Street Sell Rating -- and More Will Follow After May 28

Group 1: AI Market Overview - The evolution of artificial intelligence (AI) has captivated investors for over two years, with a potential to increase global GDP by $15.7 trillion by 2030 according to PwC [2] - Nvidia has been the most direct beneficiary of the AI revolution, with its GPUs becoming the preferred choice for enterprise AI-accelerated data centers [4][5] Group 2: Nvidia's Financial Performance - Nvidia's net sales surged from $27 billion to $130.5 billion over two fiscal years, with Wall Street projecting nearly $201 billion in sales for fiscal 2026 and $248 billion for fiscal 2027 [6] - Nvidia's gross margin has declined from 78.4% in fiscal 2025 to an estimated 70.6% for the fiscal first quarter of 2026 [21] Group 3: Analyst Sentiment and Ratings - Nvidia recently received its first Wall Street sell rating, with expectations for more analysts to follow suit after the upcoming fiscal results announcement [8][13] - Seaport Research Partners' analyst Jay Goldberg initiated coverage on Nvidia with a $100 price target, citing that the bull case is fully priced in and potential downside catalysts exist [9][10] Group 4: Challenges Facing Nvidia - Nvidia faces challenges in surpassing Wall Street's expectations due to maxed-out order capacity for its Blackwell GPU and supply chain constraints from Taiwan Semiconductor Manufacturing [10] - Businesses are expected to reevaluate their AI spending, leading to slower orders in the coming quarters [11] - Export restrictions to China pose a significant headwind, potentially impacting Nvidia's sales in a major market [12] Group 5: Competitive Landscape - Internal competition is emerging as Nvidia's top customers develop their own AI chips, which could lead to cheaper alternatives and loss of market share for Nvidia [16][17] - The scarcity of AI-GPUs that previously benefited Nvidia is diminishing as competitors like AMD introduce more affordable next-generation chips [19] Group 6: Market Sentiment and Future Outlook - Historical trends suggest that AI technologies may experience bubble-bursting events, with many businesses not yet optimizing their AI investments [22][23] - As more analysts consider these factors, the number of sell ratings for Nvidia stock is expected to increase [23]