We just covered Sell These 4 Stocks and Go All In on These 3 Stocks Before May 9th for 100x Returns? and NVIDIA Corporation (NASDAQ:NVDA) ranks 7th on this list.
NVIDIA Corporation (NASDAQ:NVDA) remains the dominant force in AI, but several specific headwinds have led some social media stock experts to the conclusion that the shares should not be touched. Some of these concerns are related to the Big 4 hyperscalers like Microsoft, Google, Meta, and Amazon. Per Instagram influencers, these firms may be reaching a plateau in their massive capital expenditure cycles and there is growing skepticism regarding the Return on Investment (ROI) for these companies. There are also long-term threats to the NVIDIA partnerships with hyperscalers. As Microsoft, with Maia, Amazon, with Trainium/Inferentia, and Google, with TPU v6, deploy their own custom AI accelerators, investors fear this will eventually strip NVIDIA of pricing power and compress gross margins.
NVIDIA Corporation (NASDAQ:NVDA) has been navigating geopolitical risks as well. The most significant of these is the ongoing US Department of Commerce restrictions on the export of high-end chips to China and other regions. TikTokers have pointed to reports of smuggling networks and fraud investigations that have increased regulatory scrutiny on the global chip supply chain. In addition this, new and proposed tariffs on international trade routes have jittered markets, specifically impacting the cost of components sourced from East Asia. There is also something to be said for good news fatigue around NVIDIA. At various points this year, the stock has traded at a forward P/E that requires nearly $200 billion in annual earnings by 2028 to justify. Any slight miss in guidance could trigger a 20–30% valuation reset.
While we acknowledge the potential of NVDA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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