The future of NVIDIA Corp (NASDAQ:NVDA) stock might not be as promising as its recent performance suggests, according to a prominent analyst.
What Happened: DA Davidson analyst Gil Luria has cautioned that Nvidia’s stock might not be able to sustain its meteoric rise due to a potential decline in demand for its GPUs, according to an interview on BNN Bloomberg.
Luria predicts that Nvidia’s profits for the last quarter will exceed $25 billion. However, he foresees a long-term decline for the chipmaker as it faces increasing competition, even from its own major customers.
“The reason we’re not quite as bullish as everybody else is we’re looking at the horizon. What’s going to happen next year? What’s going to happen in 2026? We think there’s accumulating more and more evidence this can’t continue,” Luria said. “Whenever one company extracts this much profit out of the market, competition does come in, and in Nvidia’s case, it’s coming in from its customers.
He noted that the majority of Nvidia’s business comes from its five largest customers, including Amazon, Meta, Microsoft, Alphabet, and Tesla, all of which are also major players in the AI sector. These firms are reportedly developing their own AI chips, posing a potential threat to Nvidia’s ...