Wall Street analyst updates Nvidia stock price with bearish warning

Core Viewpoint - Seaport Global Securities has issued a sell rating on Nvidia (NASDAQ: NVDA) with a price target of $140, indicating a potential 20% correction from its last closing price of $176 due to increasing competitive pressures in the semiconductor sector [1]. Group 1: Competitive Landscape - Analysts noted that Nvidia is implementing various sales strategies to adapt to the competitive environment, but these strategies have not yet fully impacted its financials [3]. - Competition from alternative technologies, particularly Google's TPUs, poses challenges as they outperform Nvidia systems on several metrics despite their limited applicability [5]. - Nvidia has increased investments in private companies, spending $6 billion this year and committing another $17 billion, including $5 billion to Intel, which reflects its strategy to maintain competitiveness [6]. Group 2: Financial Implications - Nvidia holds $26 billion in cloud compute service agreements, which are expected to fund research and development; however, these agreements may reduce gross margins by approximately 400 basis points next year, equating to about $0.30 per share [4]. - The analysts project an average target price of $257.72 for Nvidia over the next 12 months, suggesting a potential upside of 45.6% from its current price, with the most optimistic forecast at $352 and the lowest at $200 [8]. Group 3: Market Sentiment - While Seaport Global Securities remains negative on Nvidia, the broader Wall Street consensus is bullish, with 39 out of 41 analysts recommending buying the stock [7].