Nvidia Analyst Expects Stock to Collapse

By Douglas A. McIntyre Updated Apr 18, 7:36AM EDT · Published Apr 14, 8:09AM EDT

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Nvidia Analyst Expects Stock to Collapse — © Shutterstock / JRdes

Nvidia Corp. (NASDAQ: NVDA | NVDA Price Prediction) stock has sold off slightly lately. However, it is up 78% year to date and over the past year by 233% to $880. One Wall Street analyst expects it to drop to $620. Recently, Nvidia stock did stumble.

Gil Luria, senior software analyst at D.A. Davidson, has a Hold rating on the shares, which is considered the equivalent of a Sell at many firms. He says the company has “pulled forward demand.” That means that customers have ordered chips now that they will use later. This also means that 2025 customers will have a large enough inventory to slow orders of Nvidia chips. The argument is that Nvidia’s revenue could even decline quarter over the same quarter of last year.

Luria also believes that Nvidia’s challenge is that companies, including Microsoft Corp. (NASDAQ: MSFT) and Amazon.com Inc. (NASDAQ: AMZN), do not want to be caught if there is a shortage of Nvidia chips. It is better to keep some reserves.

Another argument beyond that of D.A. Davidson is that competitors that currently trail Nvidia in technology will begin to catch it. Advanced Micro Devices Inc. (NASDAQ: AMD) is at the top of this, but even if it is relatively weak, giant Intel Corp. (NASDAQ: INTC) will stake out a spot in the sector.

The most significant case against Nvidia is the one used against many companies whose shares doubled or tripled in price over one year. An ounce of difficult news can trigger a sell-off.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.