Not everyone is a believer! Doubters list the following reasons to be cautious:
Valuation Pressure: Even with a pullback, NVIDIA’s PE continues to be high relative to the rest of the market. Some would say that much of the firm’s future success is already priced in.
Geopolitical Risk: US export restrictions on high-end to China are affecting revenue estimates. As more regulatory pressure builds, NVIDIA may encounter additional international barriers.
Customer Softening: Major client Super Micro Computer slashed Q3 guidance, citing delayed platform decisions. This raised concerns about diminishing demand and potential in-house chip development by large buyers.
Growing Competition: Competitors such as AMD, Intel, Huawei, and startups like are making progress in AI and custom chips. Hyperscalers are looking at internal solutions, which is challenging NVIDIA’s leadership.
Economic Challenges: A shocking 0.3% dip in and weakening consumer expenditures have put a shadow on the valuations of tech stocks. NVDA stocks dipped 2.5% on April 30, in tandem with overall market jitters.
