‘AMD is a major threat,’ investor says of Nvidia stock

Nvidia (NASDAQ:NVDA) has been the talk of the stock market over the past year and a half. With a string of blockbuster earnings reports fueled by insatiable demand for its top-tier AI chips, Nvidia’s dominance has been one of the drivers of the bullish sentiment that has propelled the market’s gains. The scale of its success is such that it now poses a threat to Apple’s position as the second most valuable company in the world.

The question for investors currently considering an investment in Nvidia is: Can anything derail the semi-steamroller? Yes, it’s certainly possible, says investor ValueAnalyst.

“Nvidia’s revenue growth rate is declining,” says ValueAnalyst, a statement that seems shocking considering that Nvidia’s latest quarterly report reported revenue growth of 262% year-over-year. year. However, the investor points out that Nvidia was targeting revenue of $28 billion for the second quarter, a figure that represents annual growth of “only” 107%, indicating a deceleration. The same is true on a sequential basis, with quarter-over-quarter revenue growth expected to slow from 18% in the first quarter to 8% in the second quarter. “Even though the year-over-year growth rate remains high, I emphasize that the growth rate is declining and I expect it to continue to decline in the coming quarters,” says ValueAnalyst .

Perhaps most importantly, Nvidia needs to watch its back as a rival Advanced Micro Devices (NASDAQ:AMD) sets the stage for an assault with its MI300X accelerators. ValueAnalyst suggests Nvidia investors pay attention to a crucial comment recently made by a senior Microsoft executive. Scott Guthrie, executive vice president of Microsoft’s Cloud and AI group, said AMD’s MI300X accelerators are currently “the most cost-effective GPU currently for Azure OpenAI.”

The statement, according to ValueAnalyst, “supports my argument that AMD MI300X poses a significant competitive threat to Nvidia’s dominance in data centers.”

Although ValueAnalyst concedes that over the coming weeks, the stock’s outperformance could continue as “competitive analysis indicates a narrowing gap between Nvidia and its competitors,” ValueAnalyst cautions investors “not to chase actions”.

Based on all of the above, ValueAnalyst rates NVDA stock a Sell. (To view ValueAnalyst’s track record, Click here)

Contrarian views make the investing game interesting, and if you consider Wall Street’s view, ValueAnalyst’s view is certainly the same. In contrast, analyst consensus rates the stock as a Strong Buy, based on a mix of 37 Buy recommendations versus 3 Holds. By surpassing the average price target of $1,197.64, a year from now, shares will change hands for a 9% premium. (See Nvidia Stock Forecast)

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