Seaport Research downgrades Nvidia stock to sell rating

In the United States on April 30, 2025, Seaport Research Partners initiated research coverage of Nvidia, a leading player in the artificial intelligence sector, by issuing a rare sell rating. This rating was accompanied by a price target of $100 per share, indicating a potential downside of over 8% from Nvidia's closing price of $109.02 on the preceding day. Nvidia's stock has taken a significant hit throughout 2025, dropping more than 21%, and is almost 31% below its all-time high reached in January. The sharp decline in stock performance contrasts sharply with the massive gains of 239% in 2023 and 171% in 2024 during the AI boom. Analyst Jay Goldberg highlighted that all the anticipated growth from AI demand has likely been priced into Nvidia’s stock, suggesting that the company may not find a comparable growth trajectory to previous years. He pointed out the increasing competition in the market, particularly as companies like Microsoft, Meta, Alphabet, and Amazon look to invest heavily in their AI projects. The advent of China's cheaper large language model, DeepSeek, is also contributing to a scrutinized investment landscape. Investors are expressing concerns regarding the utility and profitability of AI in the face of substantial financial commitments that have yet to produce significant returns. The sell-off in Nvidia shares was fueled by broader macroeconomic concerns, including hints of a possible recession in the U.S. linked to President Donald Trump's tariffs and weak economic data from the first quarter. Reports also surfaced of declining earnings expectations from related companies like Super Micro, further compounding negative sentiment surrounding Nvidia’s market position. Despite these challenges, other analysts on Wall Street remain optimistic. About 87% of analysts have maintained a buy rating on Nvidia, predicting nearly 52% upside in the stock prices due to ongoing AI investments. In a conference call, Jim Cramer of the CNBC Investing Club, which holds Nvidia shares, expressed that recent adjustments to their Nvidia position were strategic in anticipation of volatile market conditions such as those witnessed that day. Cramer emphasized the importance of observing capital expenditure trends in AI in the upcoming earnings announcements from major players like Microsoft and Meta, indicating that they will provide stronger insights into the overall health of the AI market moving forward.