Investing.com -- Nvidia received a rare Sell rating from Seaport Research Partners in a note Wednesday, with the firm setting a $100 price target on the stock, citing valuation concerns and a shift in sentiment around AI adoption.
They argued that the chipmaker’s gains from artificial intelligence are already fully reflected in its share price.
“Nvidia is one of the leading beneficiaries of the current AI spending boom, but its prospects are well understood and largely priced into the stock,” Seaport wrote.
While the company’s next-generation Blackwell chips are already sold out for the year, the firm cautioned that “bias is to downside risks.”
Seaport also flagged logistical challenges and a murky return on AI investments as red flags.
“Our research indicates significant complexity required for deployments of Nvidia (NASDAQ:NVDA) systems,” they said, citing cooling, configuration, and orchestration hurdles.
They added that there are “mounting questions as to [the] utility of AI” as enterprise customers continue to “search for use cases and ways to generate returns from significant AI investments to date.”
A growing risk, Seaport warned, comes from Nvidia’s own customers. “Strong momentum behind hyperscalers’ internal Nvidia alternatives – Nvidia’s largest customers are all looking to design their own chips,” the analysts noted.
The firm believes AI may not be a bubble but anticipates a slowdown ahead. “Likely to see slowing of AI budgets in 2026,” they said, adding that while “AI may do well this year, NVDA is likely to underperform relative to peers.”
Their $100 price target is based on a discounted cash flow model using a 7.5% growth rate and 11.5% discount rate.
Seaport cited risks to its bearish view, including “unforeseen advances” in AI that could accelerate demand and “unexpected growth” from major customer orders.