Why Nvidia Stock Stalls: Raymond James Analyst Highlights Four Key Concerns

Nvidia (NVDA) stock has failed to capture the momentum that propelled its meteoric rise last year.

Market Cap Constraints and Ownership Gap

Investors' appetite to increase NVDA exposure is naturally capped by its $5.2 trillion market capitalization, limiting the capacity of large funds to take additional positions.

Growing Skepticism Around the AI Boom

Raymond James analyst Simon Leopold points out that the rapid expansion of the artificial‑intelligence sector may soon encounter a slowdown, and that this sentiment is already reflected in the stock price.

Law of Large Numbers and Decelerating Growth

Two years of double‑digit revenue growth are unlikely to be sustainable for NVDA; the scaling challenges inherent to its massive size are beginning to surface.

Margin and Growth‑Peak Concerns

The company appears to be approaching the ceiling of both profit margins and revenue growth, prompting investors to reassess future performance expectations.

■14% YTD stock gain, barely outpacing the S&P 500’s 12% rise.

■Micron (MU) shares up 225%, Intel (INTC) 138%, AMD (AMD) 124%, underscoring Nvidia’s relative lag within the AI‑chip ecosystem.

■2027 GAAP P/E ratio <15x, versus the S&P 500 average of 18.6x, presenting a puzzling valuation discrepancy.

■CPU revenue projected to reach 5% of total sales by 2028; still single‑digit but the fastest‑growing line item in the model.

Markets still value NVDA's strong fundamentals, yet valuation gaps, growth sustainability, and margin pressure act as headwinds that keep the stock from outperforming. The European Central Bank’s monetary stance and ongoing global trade tensions add further volatility to tech equities, encouraging a cautious investor outlook. – Defne Aydın, Director of Geopolitical Risk and European Markets