Nvidia is the world’s most valuable company with a market cap nearing $4 trillion. Little doubt that it is investors darling on Wall Street. There are as many as 80 analysts who cover Nvidia, 73 of whom reportedly have the equivalent of a buy rating on the Nvidia stock, six rate it a hold. But there’s one Jay Goldberg, who as Bloomberg says is the lone bear on high-flying Nvidia Corp. 54-year-old Jay Goldberg, a senior analyst at Seaport Global Securities, has sell rating on Nvidia stock. According to Bloomberg report, Gildberg said, “There’s a lot more that can go wrong with Nvidia than can go right.” With the AI boom driving the US economy and propelling the stock market to record after record, few people are eager to bet against the key company behind the rally.
Goldberg, however, has no qualms about going against the grain.
What’s behind SELL rating on Nvidia
“I’m probably a little cantankerous by nature, so I’m skeptical of all of the hype around AI right now,” he said. “This is not my first bubble.” Quoting Bloomberg, analyst Goldberg, who covers 12 companies, has a sell rating solely on Nvidia, while maintaining buy ratings on Apple, Netgear, and AI-exposed chipmakers Broadcom and Arm Holdings. He argues the AI investment thesis hinges on six key players — Microsoft, Alphabet, Amazon, Meta Platforms, Oracle, and OpenAI — driving demand for Nvidia chips, propelling Nvidia to a $4.5 trillion valuation. These five public companies are projected to spend nearly $400 billion on capital expenditures this year, a 67% increase from last year, while OpenAI has pledged over $1 trillion. However, with four of these companies reporting earnings next week, investors are growing skeptical about the lack of tangible returns on this massive spending. Goldberg compares this to the dot-com bubble’s telecommunications infrastructure boom, when he was earning his MBA at the University of Chicago before working at Lazard, Deutsche Bank, Peregrine Semiconductor, Qualcomm Inc., a software startup, and a venture capital firm. He notes that when expected internet traffic failed to materialize, stocks like Cisco Systems crashed and have yet to recover their 2000 peak. “That feels very strongly like the pattern we’re seeing now,” Goldberg told Bloomberg. “We’re going to build up all this AI stuff for what are largely psychological reasons. At some point the spending will stop, and the whole thing will tumble down and we’ll reset.”
