Why Nvidia’s Earnings Sparked Wall Street Debate

Have you ever watched a stock soar to dizzying heights, only to see a handful of experts raise their eyebrows and warn of trouble ahead? That’s exactly what’s happening with Nvidia right now. The tech giant, a darling of the AI revolution, recently dropped its latest earnings report, and while the numbers were impressive, not everyone on Wall Street is popping champagne. Four analysts, in particular, are waving caution flags, and their reasoning is worth a closer look. As someone who’s followed tech stocks for years, I find their skepticism both intriguing and a bit unsettling—could they be onto something, or are they just shouting into the wind?

Nvidia’s Earnings: A Mixed Bag or a Market Misstep?

Nvidia’s recent quarterly results were, on paper, a triumph. The company posted adjusted earnings of $1.05 per share, edging out the $1.01 that analysts had predicted. Revenue hit a staggering $46.74 billion, topping expectations of $46.06 billion and marking a 56% jump from the $30.04 billion reported a year earlier. These are the kinds of numbers that make investors salivate, right? Well, not quite. Despite the headline wins, Nvidia’s stock took a hit, dropping as much as 5% overnight. The culprit? A shortfall in data center revenue—a key metric for a company riding the AI wave—for the second quarter in a row.

Now, I’ve seen markets overreact before, but this dip felt different. It wasn’t just about missing one target; it was about expectations. Nvidia’s growth, while still jaw-dropping, was the slowest since mid-2023, when the AI boom was in full throttle. Suddenly, questions started swirling: Is the AI hype cooling? Are investors getting nervous about the massive bets companies are placing on artificial intelligence? Let’s dive into what the skeptics—those four Wall Street bears—are saying and why their warnings might matter to anyone with a stake in tech.

The Bearish Case: Why Some Analysts Aren’t Sold

While most analysts remain starry-eyed about Nvidia’s future, four firms have taken a more cautious stance. Their concerns aren’t just about one quarter’s numbers—they’re looking at the bigger picture. From supply chain hiccups to geopolitical risks, these bears see storm clouds on the horizon. Here’s a breakdown of their arguments, and I’ll be honest: some of their points hit harder than I expected.

Seaport Research Partners: The Risk of a Steep Fall

Seaport Research Partners isn’t mincing words—they’ve slapped a sell rating on Nvidia with a price target of $100 per share. That’s a potential 45% drop from the stock’s recent close of $181.60. Ouch. Their reasoning? Nvidia’s results were solid but didn’t blow the doors off like some hoped. The much-hyped Blackwell chip ramp-up is on track, but there’s little room for upside surprises this year. Plus, there’s a wildcard: sales to China. With approvals still pending, this market remains a question mark, and Seaport thinks the industry might struggle to absorb the massive AI investments being thrown around.

The industry’s ability to digest these huge AI bets is a real concern. Without China sales, Nvidia’s growth could stall.

– Investment research firm

I’ll admit, Seaport’s take feels a bit grim, but it’s not baseless. The AI sector is a money pit right now—companies are pouring billions into infrastructure, and if the returns don’t materialize soon, investors could get spooked. Still, calling for a 45% plunge seems bold, maybe even a touch dramatic. What do you think—overreaction or a wake-up call?

Deutsche Bank: Steady, but Not Spectacular

Deutsche Bank takes a less apocalyptic view, sticking with a hold rating and nudging their price target up to $180 from $155. They see Nvidia as the undisputed king of AI tech, with strong revenue growth driven by diverse demand. But here’s the catch: their forecasts don’t include China sales, which could add a $2 billion to $5 billion boost in the third quarter if approvals come through. Without that, they think the stock is fairly valued at current levels, based on a 27x P/E multiple.

Here’s where I raise an eyebrow. Nvidia’s dominance is undeniable, but “fairly valued” in this market feels like a polite way of saying “don’t expect fireworks.” Deutsche’s cautious optimism makes sense, but it also hints at a market that’s gotten used to Nvidia’s stratospheric gains. Maybe we’ve been spoiled by the AI frenzy?

D.A. Davidson: Neutral with a Side of Hope

D.A. Davidson keeps things middle-of-the-road with a neutral rating and a price target of $195, up from $135. That suggests a modest 7% upside. Their take? Nvidia’s data center revenue missed the mark slightly, and the ongoing uncertainty around H20 chip sales to China is a drag on sentiment. But they’re not all doom and gloom. Their research into AI algorithms suggests that demand for computing power isn’t going anywhere—pre-training, post-training, and inference are keeping the engines humming.

Compute demand is here to stay, driven by trends in AI model development that show no signs of slowing.

– Financial analysts

I find this perspective refreshing. It acknowledges the bumps in the road while betting on the long-term AI trend. It’s like they’re saying, “Yeah, there’s turbulence, but the plane’s still climbing.” Still, that China uncertainty looms large—more on that later.

HSBC: Holding Steady Amid Uncertainty

HSBC rounds out the bearish quartet with a hold rating and a $200 price target, implying about 10% upside. They’ve bumped up their earnings estimates for 2026 slightly, thanks to better-than-expected margins, but they’re keeping 2027 projections steady. Their concern? Supply inconsistencies and the China question could weigh on Nvidia’s stock in the near term. To get more bullish, they’d need to see bigger capital expenditure forecasts for 2026 from cloud service providers.

HSBC’s take feels like a reality check. They’re not denying Nvidia’s strength, but they’re pointing out that the stock’s price assumes a lot of things going right. If supply chains wobble or China sales don’t materialize, that 10% upside could vanish fast. It’s a sobering thought for anyone riding the Nvidia wave.

The Bullish Counterpoint: Why Most Analysts Are Still All In

Okay, let’s flip the script. While the bears are grumbling, the majority of Wall Street is still chanting Nvidia’s name. Many analysts raised their price targets after the earnings report, shrugging off the data center miss. Why? Because Nvidia’s third-quarter guidance was robust, and the potential for China sales could push revenue even higher. Plus, the company’s grip on the AI market is ironclad—nobody else comes close to their GPU dominance.

In my view, this optimism isn’t just blind hype. Nvidia’s chips are the backbone of the AI revolution, powering everything from chatbots to self-driving cars. The fact that they’re still growing at 56% year-over-year is bananas—most companies would kill for half that. But the bears have a point: growth is slowing, and the market’s expectations are sky-high. It’s like Nvidia’s running a marathon at a sprinter’s pace—how long can they keep it up?

• Strong fundamentals: Nvidia’s earnings and revenue beat expectations, showing resilience.
• AI leadership: Their GPUs remain the gold standard for AI workloads.
• China potential: Sales approvals could add billions to the top line.

Still, the bulls aren’t ignoring the risks. They’re just betting that Nvidia’s innovation and market position will outweigh the headwinds. It’s a classic glass-half-full versus glass-half-empty debate.

The China Factor: A Wildcard for Nvidia’s Future

Let’s talk about the elephant in the room: China. Nvidia’s guidance didn’t include potential sales to this massive market, and for good reason—regulatory approvals are still up in the air. If those approvals come through, analysts estimate a $2 billion to $5 billion revenue boost in Q3 alone. That’s not pocket change, even for a company like Nvidia. But if the green light doesn’t come, or if geopolitical tensions escalate, it’s a significant headwind.

I’ve always thought China’s role in tech is like playing chess on a global scale—one wrong move, and the board flips. Nvidia’s caught in the middle, and the bears are right to flag this as a risk. But here’s the flip side: even without China, Nvidia’s growth is still outpacing most of the tech sector. Maybe the bears are overthinking this one?

What This Means for Investors

So, where does this leave you if you’re an investor? Nvidia’s a tricky one. The stock’s been on a tear, but the bears’ warnings can’t be dismissed outright. Here’s a quick rundown of what to consider:

1. Valuation concerns: At current prices, Nvidia’s stock assumes near-perfect execution. Any stumbles could trigger a sell-off.
2. AI demand: The long-term trend for AI computing is still strong, but short-term hiccups (like supply chains) could create volatility.
3. Geopolitical risks: China’s a big question mark, and regulatory hurdles could delay growth.

Personally, I’d approach Nvidia with cautious optimism. The company’s fundamentals are rock-solid, but the market’s expectations are borderline unrealistic. If you’re holding the stock, maybe keep an eye on those China developments and data center numbers. If you’re thinking about jumping in, consider waiting for a dip—those bears might just be onto something.

This table sums up the bears’ stance, but it’s worth noting that the majority of analysts are still bullish. The question is whether you trust the crowd or the contrarians.

Final Thoughts: Navigating the Nvidia Rollercoaster

Nvidia’s latest earnings have sparked a fascinating debate on Wall Street. On one hand, the company’s numbers are stellar, and its role in the AI revolution is unchallenged. On the other, the bears are sounding alarms about slowing growth, supply chain risks, and the China wildcard. As someone who’s watched tech stocks ride these waves before, I think the truth lies somewhere in the middle. Nvidia’s not going anywhere, but the road ahead might be bumpier than the bulls expect.

What’s your take? Are you riding the Nvidia wave, or are you siding with the bears? One thing’s for sure: in the fast-moving world of tech stocks, there’s never a dull moment.

Investment Formula: Strong Fundamentals + Market Sentiment = Stock Success

That’s my two cents, but the market’s always got the final word. Keep your eyes on Nvidia—it’s a story that’s far from over.