Nvidia inventory (NVDA) has misplaced greater than 7% because the firm posted quarterly earnings on Aug. 27, although shares stay up 25% 12 months thus far.
The synthetic intelligence chipmaker has been a large beneficiary of the generative AI growth following the launch of ChatGPT. Its shares surged 171% in 2024, making it one of many prime performers of the 12 months.
Through the first half of the 12 months, Nvidia confronted a string of challenges, together with tariff tensions, the U.S. tightening export restrictions on superior chips, and a broader market uncertainty round tech valuations.
A few of these pressures have eased. In August, Nvidia struck a cope with the U.S. authorities to renew gross sales in China for a price of 15% of the gross sales. The compromise allowed Nvidia to unlock a key supply of demand.
However now, a brand new risk has emerged, and one analyst is decreasing his goal due to that.
Jensen Huang’s Oct. 28 GTC keynote could possibly be a key catalyst for Nvidia inventory.
Picture supply: Morris/Bloomberg by way of Getty Photographs
Nvidia’s Q2 information middle income missed estimates
Nvidia stays a number one participant within the AI race, with its income nonetheless rising quick and CEO Jensen Huang repeatedly stressing the robust demand for Blackwell, Nvidia’s key graphics processing unit (GPU) structure on which tech hyperscalers are spending billions.
“Production of Blackwell Ultra is ramping at full speed, and demand is extraordinary,” Huang stated in an Aug. 27 press launch. “The AI race is on, and Blackwell is the platform at its center.”
Related: Analysts turn heads with Nvidia rival’s stock target after earnings
However, the company’s Q2 data center revenue missed estimates for the second straight quarter, which has dragged on the stock’s recent performance.
Nvidia’s Q2 earnings were $1.05 per share, beating Wall Street estimates of $1.01. Revenue rose 56% to $46.74 billion, higher than analysts’ forecast of $46.06 billion.
Citi trims Nvidia stock price target
Citi analyst Atif Malik lowered his price target on Nvidia to $200 from $210 while maintaining a buy rating, according to a Monday note.
Malik said Nvidia’s dominance in AI chips is coming under pressure as rivals push their own custom processors, pointing to Broadcom (AVGO) , which recently reported strong quarterly results and disclosed a $10 billion order for its XPUs, the company’s next-generation custom accelerators.
Related: Veteran Nvidia analyst drops blunt 4-word message on its future
“Whereas GPUs will proceed to dominate the AI compute market with an 85%+ gross sales share, we imagine the XPU market accelerates year-over-year into 2026,” Malik wrote. He projects the XPU segment will grow 53% in 2026, outpacing the 34% growth expected for AI GPUs, driven largely by ramp-ups at Google, Meta, and Amazon.
Citi now estimates about $12 billion less in GPU sales for 2026 than it had previously modeled, including a $2 billion reduction from Meta. That implies roughly a 5% hit to its prior $232 billion forecast for 2026 merchant GPU sales.
Nvidia’s risks highlighted by Citi
- Competition in gaming could pressure the stock if Nvidia loses market share.
- Slower adoption of new platforms may weigh on sales of data center and gaming.
- Volatility in auto and data center markets could add to stock swings.
- Cryptomining may impact gaming sales.
“Importantly, our estimates don’t embrace China, which could possibly be a supply of upside if and when Nvidia restarts GPU shipments to China,” Malik added.
Nvidia closed at $168.31 on Sept. 8. Citi expects Huang’s Oct. 28 GTC keynote to be a key catalyst for the stock.
Associated: Goldman Sachs revamps S&P 500 goal for 2026
