Nvidia Faces Wall Street’s Only ‘Sell’ Rating — Analyst Warns Of ‘Opaque Accounting’ And Rising Competitive Pressure

• Seaport’s Jay Goldberg maintained a $140 price target, roughly 21% below Nvidia’s Friday close.
• The analyst cited Nvidia’s growing pre-paid cloud compute obligations and large investment commitments.
• Goldberg also pointed to increasing competition from Google’s TPUs and other emerging AI hardware.

Seaport Research Partners analyst Jay Goldberg, the only analyst with a 'Sell' rating on Nvidia, reiterated his bearish view on Sunday, citing what he called “opaque accounting” and rising competitive pressures.

Goldberg kept a $140 price target, about 21% below Nvidia’s Friday close of $177, even as the chipmaker’s shares have surged 33% this year. The stock is up 1.5% at the time of writing. 

Prepaid Cloud Deals And Customer Backstops

Goldberg said recent online speculation over Nvidia’s accounting was not evidence of wrongdoing but pointed to financial items he believed were not fully reflected in its financial results, according to a report by CNBC.

He highlighted the company’s $26 billion in prepaid cloud compute expenses, which Nvidia has described as funding research and development and DGX-related cloud offerings. Goldberg said he viewed the amount as functioning more like rebate-style backstops, in which Nvidia commits to buying excess customer capacity on Nvidia-based systems.

He also cited rising working capital, underscored by Nvidia’s $6 billion spent on private-company investments this year and $17 billion in additional commitments, including $5 billion to Intel. He said an unsigned OpenAI arrangement could add another $100 billion in obligations.

Competition From Google TPUs

Goldberg warned that Google’s internally developed TPUs were becoming more competitive and, in some workloads, already outperformed Nvidia’s systems. He said he was surprised by how actively Google had promoted TPU adoption among external developers.

Morgan Stanley Lifts Nvidia Target To $250

In a separate note, Morgan Stanley maintained its ‘overweight’ rating on Nvidia and raised its price target to $250 from $235, saying the AI leader continued to dominate market share.

Analyst Joseph Moore said customers’ “biggest anxiety for the next 12 months is their ability to procure enough NVIDIA product generally, and Vera Rubin specifically.”

Huang Defends GPU Model, Downplays ASIC Threat

Meanwhile, Nvidia CEO Jensen Huang, in a CNBC interview on Monday, said the industrial economy was undergoing a long shift from CPU-based infrastructure to GPU-accelerated computing. He downplayed concerns about TPUs or ASIC competition, saying Nvidia had competed against ASICs “for quite a long time” and maintained an advantage through its CUDA software ecosystem and the breadth of GPU architecture.

Huang said Nvidia’s demand remained strong without China and described any future business there as a “bonus opportunity.” “If China comes along … that’s going to be a huge bonus opportunity,” he said.

Nvidia Invests $2 Billion In Synopsys

Nvidia separately announced a $2 billion stake in Synopsys as part of an expanded industrial design and engineering partnership spanning semiconductors, aerospace, automotive and manufacturing sectors.

Synopsys will integrate Nvidia’s CUDA-X, AI-Physics tools and Omniverse simulation platform, helping accelerate compute-heavy engineering work. 

Stocktwits Traders Call Nvidia A ‘Safe Haven’ 

On Stocktwits, retail sentiment was ‘bullish’ amid ‘normal’ message volume.

One user said, “This is a safe haven for bitcoin investors getting out of bitcoin.”

Another bullish user said, “just gonna have to wait tomorrow for some movement. Been trading cents back and forth. Better than Red like some of the other techs.”

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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