Investing.com -- Lynx Equity Strategies said investors should exercise patience with Nvidia (NASDAQ:NVDA)'s stock, stating they should "step aside and look for a better entry point" in a note Wednesday.
The firm's analysts highlight growing uncertainties tied to Nvidia's product transitions, particularly the launch of its Blackwell GPUs, which have faced delays and technical issues.
While Nvidia’s CEO has described Blackwell demand as “insane,” Lynx points out that the high expectations for the product could be problematic if supply constraints persist or technical issues remain unresolved.
“Are customers willing to plunk down ~$1bn-$2bn in upfront hardware cost for a 20K GPU datacenter without first gaining conviction that the problems associated with the initial delay in launch have been resolved? We do not think so,” the analysts state.
Adding to the concerns is the declining momentum for Nvidia’s Hopper GPUs. Lynx notes signs of softening demand for Hopper, highlighted by disappointing results from key partners like SMCI.
The firm questions whether Nvidia’s current data center revenue growth expectations, which are projected at 50% year-over-year for late 2025, are realistic.
Beyond product-specific challenges, the analysts observe broader market dynamics, suggesting the AI hype cycle may be waning. They caution that as hyperscale customers increasingly prioritize return-on-investment metrics, Nvidia’s growth rates could decelerate significantly.
Despite Nvidia’s leadership in AI and a robust position in the GPU market, Lynx concludes that the stock's current valuation leaves little room for error. They feel investors should wait for clarity on Blackwell’s performance and market adoption before making significant commitments.