- Nvidia stock can't keep climbing forever, according to DA Davidson analyst Gil Luria.
- The Wall Street veteran sees a decline of as much as 20% in Nvidia stock in the next few years.
- He anticipates lower demand for Nvidia's GPUs and more competition.
It might not seem like it now, but Nvidia's winning streak can't last forever.
That's according to Gil Luria, a DA Davidson analyst who's one of the most bearish forecasters on Nvidia over the long-haul.
It's no surprise that the chipmaker blew away Wall Street's expectations with its latest earnings report, Luria told BI. The company just pulled a record $26 billion in revenue over the first quarter, but that's largely because Nvidia's top customers had signaled they were planning to ramp up spending for its GPU products, Luria said.
That trend will falter, Luria predicts, and he says he's anticipating a double-digit decline for the chip maker's stock within the next 18 months. NVDA shares could drop to around $900 by 2026, Luria estimated, which implies around a 14% decline from its current levels, and as much as a 20% decline over the next year-and-a-half is feasible, he added.
"My estimates for 2026 are the lowest on the Street," Luria said. "The short-term outlook is phenomenally good. The longer-term outlook is probably worse than most anticipate."
He's swimming upstream against a current of bulls, who point to the company's profits climbing ever-higher through the past few years. Yet, Nvidia's biggest customers include tech titans like Meta, Alphabet, and Amazon, who are already working on their own AI chips or investing in other partners — and their dependency on Nvidia is likely to wane over time, Luria said.
"This isn't a secret or speculation. This is something these companies are already talking about," Luria said. "It just takes time. It's not a 2024 event, because it takes time to ramp production, to write the software, to get customers comfortable with that as an alternative. But it does mean that it should have much more of impact over the next year or two."
Luria said he would assign a "sell" rating on the stock as soon as Nvidia's top customers —which include Amazon, Alphabet, Meta, and Tesla — start to pull back.
Luria has warned of a long-term decline for Nvidia stock for months, though investors are still feeling pretty bullish. NVDA shares notched an all-time high after reporting first-quarter results, and the chorus of upbeat analysts has only grown amid the continued AI gold rush.