Nvidia stock (NVDA) has lost more than 7% since the company posted quarterly earnings on Aug. 27, though shares remain up 25% year to date.
The artificial intelligence chipmaker has been a massive beneficiary of the generative AI boom following the launch of ChatGPT. Its shares surged 171% in 2024, making it one of the top performers of the year.
During the first half of the year, Nvidia faced a string of challenges, including tariff tensions, the U.S. tightening export restrictions on advanced chips, and a broader market uncertainty around tech valuations.
Some of those pressures have eased. In August, Nvidia struck a deal with the U.S. government to resume sales in China for a fee of 15% of the sales. The compromise allowed Nvidia to unlock a key source of demand.
But now, a new threat has emerged, and one analyst is lowering his target because of that.
Image source: Morris/Bloomberg via Getty Images
Nvidia’s Q2 data center revenue missed estimates
Nvidia remains a leading player in the AI race, with its revenue still growing fast and CEO Jensen Huang repeatedly stressing the strong demand for Blackwell, Nvidia’s key graphics processing unit (GPU) architecture on which tech hyperscalers are spending billions.
“Production of Blackwell Ultra is ramping at full speed, and demand is extraordinary,” Huang said in an Aug. 27 press release. “The AI race is on, and Blackwell is the platform at its center.”
Related: Analysts turn heads with Nvidia rival’s stock target after earnings
However, the company’s Q2 data center revenue missed estimates for the second straight quarter, which has dragged on the stock’s recent performance.
Nvidia’s Q2 earnings were $1.05 per share, beating Wall Street estimates of $1.01. Revenue rose 56% to $46.74 billion, higher than analysts’ forecast of $46.06 billion.
Citi trims Nvidia stock price target
Citi analyst Atif Malik lowered his price target on Nvidia to $200 from $210 while maintaining a buy rating, according to a Monday note.
Malik said Nvidia’s dominance in AI chips is coming under pressure as rivals push their own custom processors, pointing to Broadcom (AVGO) , which recently reported strong quarterly results and disclosed a $10 billion order for its XPUs, the company’s next-generation custom accelerators.
Related: Veteran Nvidia analyst drops blunt 4-word message on its future
“While GPUs will continue to dominate the AI compute market with an 85%+ sales share, we believe the XPU market accelerates year-over-year into 2026,” Malik wrote. He projects the XPU segment will grow 53% in 2026, outpacing the 34% growth expected for AI GPUs, driven largely by ramp-ups at Google, Meta, and Amazon.
Citi now estimates about $12 billion less in GPU sales for 2026 than it had previously modeled, including a $2 billion reduction from Meta. That implies roughly a 5% hit to its prior $232 billion forecast for 2026 merchant GPU sales.
Nvidia’s risks highlighted by Citi
- Competition in gaming could pressure the stock if Nvidia loses market share.
- Slower adoption of new platforms may weigh on sales of data center and gaming.
- Volatility in auto and data center markets could add to stock swings.
- Cryptomining may impact gaming sales.
“Importantly, our estimates do not include China, which could be a source of upside if and when Nvidia restarts GPU shipments to China,” Malik added.
Nvidia closed at $168.31 on Sept. 8. Citi expects Huang’s Oct. 28 GTC keynote to be a key catalyst for the stock.
Related: Goldman Sachs revamps S&P 500 target for 2026
#Analyst #surprisingly #cuts #Nvidia #stock #target #growing #threat