TLDR
- NVDA closed at $114.50 on May 2, up 2.59%
- Seaport Global issued Nvidia’s first sell rating, $100 target
- Concerns over AI chip slowdown and China’s competition
- Stock down 14.7% YTD but up 33.5% over the past year
- Nvidia remains dominant with a reasonable valuation
Nvidia Corporation (NASDAQ: NVDA) closed at $114.50 on May 2, rising 2.59%, even after Wall Street issued its first sell call on the AI chip leader. Seaport Global downgraded Nvidia, citing rising risks from customer chip in-sourcing, a potential slowdown in AI budgets, and fresh competition from China. Yet investors shrugged off the warning, betting on Nvidia’s dominant position in a growing market.
First Wall Street Sell Sparks Worries
Jay Goldberg of Seaport Global cut Nvidia to a sell, setting a $100 price target, the lowest among analysts. He argued that AI upside is “priced in for now” and warned that top customers are designing their own chips, which could dent Nvidia’s future sales. Goldberg also sees global AI spending slowing in 2026, tightening near-term prospects.
His downgrade came after Nvidia’s rough start to 2025, with shares down nearly 15% year-to-date. New U.S. export restrictions on AI chips to China have added pressure, raising concerns about lost overseas sales.
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Nvidia Just Got Its First Sell Rating From Wall Street — Should Investors Be Worried? https://t.co/gFFwbEq81Q
— News Wave (@mynewswave) May 3, 2025
Dominant in Chips, Despite Rising Rivals
Still, many analysts remain bullish. They argue that Nvidia’s technology lead remains intact, with rivals like Huawei only now testing chips to match Nvidia’s older H100 series. Nvidia continues to innovate faster than competitors and retains its grip on the high-end AI chip market.
While large players like Microsoft and Meta explore building custom AI chips, smaller and mid-sized firms are likely to stick with Nvidia’s best-in-class solutions. This broader customer base could offset any slowdown among the top spenders.
Valuation Looks Reasonable After Pullback
Despite the YTD slump, Nvidia stock still boasts a stellar long-term track record—up 33% over the past year and a stunning 487% over three years. Over five years, Nvidia shares have soared more than 1,500%, far outpacing the S&P 500’s 100% gain.
With a forward price-to-earnings ratio of 26, Nvidia’s valuation now looks more reasonable after the recent correction. For investors who believe in AI’s long-term promise, Nvidia’s leadership in chips and software makes it a top pick, even amid near-term volatility.
All eyes will be on Nvidia’s upcoming earnings and customer demand trends, which will determine whether this Wall Street downgrade marks the start of deeper trouble or merely a pause before the next leg higher.
