Nvidia Corp (NASDAQ: NVDA) delivered another quarter of solid earnings– coming in ahead of Street estimates for both top and bottom-line.
Executives offered upbeat commentary around the Blackwell chip ramp and reiterated its positive stance on AI infrastructure, forecasting long-term demand from “AI super factories” as well.
Yet, even the strong guidance failed to turn Seaport Research analysts any more bullish on NVDA shares.
The investment firm maintained its “sell” rating on the AI stock this morning – warning of potential for a massive crash to $100, indicating up to 45% downside from current levels.
At the time of writing, Nvidia stock is up roughly 90% versus its year-to-date low in early April.
Why Seaport Research remains bearish on Nvidia stock
Seaport Research analyst Jay Goldberg attributes his bearish stance on NVDA stock to near-term demand risks and the industry’s ability to absorb massive AI investments.
Pushing back on the prevailing bullish narrative, he told clients that Nvidia lacks meaningful room to the upside even though its quarterly numbers topped expectations and the Blackwell ramp is “progressing in line with expectations.”
According to him, uncertainty around the multinational’s China business amid continued Sino-US tensions remain a major overhang on Nvidia shares. In his research note, Goldberg also questioned the substance of Nvidia’s earnings call – calling it light on actionable insight.
“We are increasingly concerned about near-term demand as few companies have found ways to drive revenue from AI beyond coding tools,” he warned, suggesting the sector’s spending spree may now be outpacing real-world monetization.
NVDA shares are already trading at a premium valuation
Other than demand and China-related risks, Jay Goldberg cited a valuation premium for his bearish stance on Nvidia stock as well.
At the time of writing, the semiconductor giant is going for a forward price-to-earnings (P/E) ratio of nearly 45 and a price-to-sales (P/S) multiple of about 34– both of which sit well above the industry average, as per data from Barchart.
In his note to clients, the Seaport Research analyst argued NVDA shares’ current valuation assumes near-flawless execution and sustained AI dominance – and while the AI darling is well-positioned to deliver on it, it’ll likely require geopolitical stability at the very least to meet those expectations.
Moreover, the market is overlooking other key risks. “The level of AI spending has gotten to the point that the industry needs use cases for larger audiences,” he added.
Simply put, Nvidia’s current valuation hinges on broad AI adoption that hasn’t yet materialized. Without clear revenue pathways beyond developer tools, Goldberg believes Nvidia’s stock is vulnerable to a correction – especially if macro headwinds or regulatory hurdles emerge.
Note that other Wall Street analysts disagree with Seaport Research on Nvidia stock, given the consensus rating remains at “strong buy”.
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