Nvidia (NVDA) is trading lower in early Monday action, down nearly 1%. In a new report today, Seaport Research Partners analyst Jay Goldberg retained his Sell rating and $140 price target on Nvidia. The analyst said the company is now facing tougher competition and growing financial pressure that could affect results next year.
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What’s Behind the Bearish Call on NVDA?
Goldberg agrees Nvidia is still the clear leader in AI chips, but he thinks the gap is starting to narrow. He pointed to Google’s TPU chips, which are now open to outside developers rather than just used internally. While TPUs won’t replace Nvidia everywhere, he said they already outperform Nvidia in certain workloads. Over time, he believes that could weaken Nvidia’s pricing power.
Goldberg also raised concerns about Nvidia’s $26 billion in cloud compute agreements. Nvidia said these deals support research and its DGX offering, but Goldberg sees them more like rebates tied to sales. If treated that way, he estimates Nvidia’s gross margins could fall by about 4 percentage points next year.
He also highlighted Nvidia’s growing financial commitments. The company has already spent $6 billion investing in private firms and has another $17 billion committed, including $5 billion to Intel (INTC). Goldberg warned that a potential deal with OpenAI (PC:OPAIQ), though still not signed, could add up to $100 billion more, which he views as a major spending risk.
Is Nvidia a Buy or Sell Stock?
According to TipRanks, NVDA stock has a Strong Buy consensus rating based on 39 Buys, one Hold, and one Sell assigned in the last three months. At $257.26, the Nvidia average share price target implies almost 47% upside potential.
