Analyst Note Announced: Nvidia Share Price Plummets Suddenly

In a note published on Friday, New Street Research analysts downgraded Nvidia shares from Buy to Neutral. The independent research company stated that, based on what they’ve heard from the value chain, they predict limited further upside and that, in line with their previous forecast, consensus forecasts imply GPU revenues would climb by 35% in 2025.

We downgrade the stock to Neutral today, as upside will only materialize in a bull case, in which the outlook beyond 2025 increases materially, and we do not have the conviction on this scenario playing out yet,

Analysts

Risk in Nvidia Shares: Revenue Growth, Competition and Market Valuation

According to New Street Research, the current consensus predicts revenue growth to decrease to the mid-teens. However, given the probable slowdown in hyperscale capital expenditures and growing competition from ASICs and AMD, this rate could be vulnerable.

As suggested by analysts, a further rise in the stock seems unlikely if the outlook stays the same. Conversely, they alert investors to the possibility of a derating slide, given that the company is presently trading at 40 times next year’s earnings per share (NTM EPS), up from a 20x low reached in 2019 when growth slowed to 10% before rising to 35x.

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