‘Time to Jump Ship,’ Says Top Investor About Nvidia Stock

Excitement has reached a fever pitch as Nvidia (NASDAQ:NVDA) gets ready to unveil its Q1 2027 earnings report. Nvidia’s rabid bulls – of which there are many – are expecting yet another victory lap for the data center giant.

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Nvidia’s best-in-class GPUs remain the backbone of the AI race, which still appears to be operating at full throttle. Hyperscaler capital expenditures are expected to climb into the hundreds of billions of dollars this year alone, while several tech giants – including Alphabet – have recently boosted their spending plans even further as the battle for AI leadership intensifies.

That demand is expected to keep driving Nvidia’s revenue, profits, and share price higher. The company previously guided for $78 billion in revenue for the recently concluded quarter, up from $68.1 billion in Q4 fiscal 2026, yet many on Wall Street believe Nvidia could once again clear an even higher bar.

While acknowledging the company’s “hypergrowth,” one top investor, known by the pseudonym Noah’s Arc Capital Management, has become more convinced that the time has come to jump ship.

“Nvidia’s position is more threatened now than it has ever been before,” states the 5-star investor, who’s among the top 3% of stock pros covered by TipRanks.

Noah’s Arc cites a number of developments that coalesce into this bearish take. For one, the investor expects the backlash against data centers in the U.S. – from both left and right – to gain steam, especially after the upcoming midterm elections. That could put a huge dent in Nvidia’s business model.

“In order to hit their growth assumptions, there need to be significantly more data centers next year than there are right now,” adds Noah’s Arc. “This is looking increasingly unlikely.”

Another concern the investor highlights revolves around the shift from GPUs to CPUs, as the age of inference dawns. While Nvidia is the king of GPU technology, when it comes to CPUs, the company doesn’t possess an “industry-leading” lineup. Noah’s Arc predicts that the company’s CUDA moat will become less robust as companies increasingly adopt non-Nvidia technology.

And that makes the investor believe that the company’s share price is “seriously overvalued.” Noah’s Arc cites NVDA’s forward price-to-sales ratio of 14.6x, which is much higher than the sector median of 3.3x. If the company’s pricing power decreases (as Noah’s Arc expects), this would pressure NVDA.

“Heading into earnings, I am more bearish today on the company than I was originally when I wrote my first Strong Sell rating over 2 years ago,” concludes Noah’s Arc. (To watch Noah’s Arc’s track record, click here)

Wall Street could hardly disagree more. Nvidia currently boasts a Strong Buy consensus rating backed by 40 Buy ratings against just 1 Hold and 1 Sell. Meanwhile, the Street’s average price target of $281.97 suggests the shares could still climb another ~27% over the coming year. (See NVDA stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.