NVDA (NVDA, stock price: $1064.690, total market value: $2.62 trillion) was suddenly bombed by Wall Street giants.
Since the beginning of the artificial intelligence (AI) boom, Nvidia's stock price and performance have been soaring. As of the latest close, its stock price has exceeded $1000, with the latest report reaching $1064.69, setting a new historical high. The cumulative increase for the year has reached 115%, and the latest total market value has risen to $2.62 trillion (approximately RMB 19 trillion), with a cumulative increase of $1.4 trillion (approximately RMB 10 trillion) for the year.
According to a report by the Securities Times on the 28th, Wall Street analysts suddenly issued a warning that the rising stock price of Nvidia carries enormous risks and may plummet by 20% in the future.
Gil Luria, an analyst at investment bank DA Davidson, said that Nvidia's latest performance report exceeded Wall Street's expectations, with revenue reaching a record high of $26 billion in the first quarter, mainly due to Nvidia's top customers increasing their spending on its GPU products. But Gil Luria predicts that this trend will shake, and Nvidia's stock price will experience a double-digit drop in the next 18 months.
He estimates that by 2026, Nvidia's stock price may drop to around $900, which means its stock price will fall by about 15% from current levels, and in a more pessimistic scenario, the decline could be as high as 20%. Gil Luria admits that Nvidia's short-term outlook is very good, but the long-term outlook may be even worse than most people expect. Nvidia's largest customers include Meta Alphabet、 Technology giants such as Amazon are already developing their own artificial intelligence chips or investing in other partners. This means that over time, their dependence on Nvidia may weaken.
Gil Luria stated that once Nvidia's main customers - including Amazon Alphabet, Meta, and Tesla have started to withdraw their investments, and he will give the stock a "sell" rating. At the same time, Rob Arnott, legendary investor and chairman of Research Affiliates, a quantitative investment institution, also warned that Nvidia's stock looked more like a foam, and the company's price to sales ratio (, PS is an astronomical number, and the reason they are astronomical numbers is because their profit margin is absolutely huge.
Rob Arnott pointed out that Nvidia's success in the market is based on its idea of continuing to dominate the semiconductor industry in the future.
Earlier, just as Nvidia was about to announce its performance, there was heavyweight news coming from the periphery. Stanley Druckenmiller, a hedge fund tycoon and founder of Duken Capital Management, believes that AI has become excessively foam, so in the first quarter of this year, he significantly reduced his holdings of Nvidia shares by 72%. According to Duke University's 13-F document, Druckenmiller's hedge fund has an average annual return of 30% over the past 30 years.
With soaring revenue and profits, Nvidia's stock price has risen by over 500% since the beginning of 2023. It is now the third most valuable company in the world, second only to Microsoft and Apple, which means it will be difficult to double the stock again.
After the US stock market closed on Wednesday, May 22nd, chip giant Nvidia released its first quarter results for the fiscal year 2025 as of the end of April this year (Nvidia's fiscal year is not synchronized with the natural year). The total revenue and data center revenue both reached new highs, with a revenue of 26.04 billion US dollars, a year-on-year increase of 262%; Net profit of 14.88 billion US dollars, a year-on-year increase of 628%; The gross profit margin for the quarter was 78.9%, significantly higher than expected.
This is also the third consecutive quarter in which Nvidia's revenue growth rate exceeded 200% year-on-year. Previously, Q3 2024 revenue was $18.12 billion, a year-on-year increase of 206%. Q4 2024 revenue was $22.1 billion, a year-on-year increase of 265%.
Nvidia's data center business broke a historical record with a revenue of $22.26 billion this quarter, an increase of 23% month on month and a significant increase of 427% year-on-year. In the financial report, Huang Renxun confidently stated that he is "ready for the next wave of growth", and the strongest chip Blackwell in the second quarter will be shipped, which will bring in a large amount of revenue this year. Nvidia also announced a 10 to 1 split from June 10th to facilitate investor holding at a lower price, and announced a 150% increase in dividends to $0.01 per share.
In the short term, Nvidia's stock price still has many positive catalysts. Among them, Nvidia's announced "1 spin 10" stock split plan will officially take effect on June 7th. Analysts point out that stock splits should attract retail investors, although the market value of companies has not actually changed. The company stated that a stock split will make it easier for employees and investors to purchase stocks.
Nvidia's last stock split was in 2021, when it issued 3 new shares per share (split 1-4). In May 2021, Nvidia announced plans for a 1:4 stock split. At that time, Nvidia's stock price was around $600, and before the split took effect, Nvidia's stock price rose as high as $835.
Analysts believe that investors tend to react positively to stock splits, which is more of a psychological phenomenon rather than rooted in any fundamentals. For investors, splitting can attract more buyers, increase liquidity, and lower prices can also psychologically make them feel cheap, even though the basic value of the company has not changed. Analysts believe that Nvidia's stock split may drive up the stock price of chip manufacturers in the short term and boost the already enthusiastic investor sentiment.
From the data, companies that announce stock splits often perform better than the market. According to an analysis by the Global Research Center of Bank of America in February, data since 1980 shows that companies that announced stock splits in the S&P 500 index have performed significantly better than the index in the first 3, 6, and 12 months after the initial announcement. The stock price of companies that announced stock splits has increased by an average of 25.4% over the past 12 months, while the S&P 500 index has increased by an average of 11.9% over the same period.
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