Nvidia Downgrade By Pierre Ferragu's New Street Countered By Dan Ives: 'Cannot Disagree More…'

Wedbush analyst Dan Ives has strongly opposed a recent downgrade of Nvidia Corp. NVDA by New Street Research, citing the AI revolution as a key factor.

What Happened: Ives expressed his disagreement with the negative assessment of Nvidia’s future prospects in a post on X. He emphasized that the AI revolution, led by Nvidia and its CEO Jensen Huang, is just beginning.

“We cannot disagree more with this negative Nvidia call as discussed on @LastCallCNBC last night as the AI Revolution is just starting in our view being led by Nvidia and the Godfather of AI Jensen in this 9 pm party,” wrote Ives.

New Street Research’s Pierre Ferragu downgraded Nvidia to neutral, citing concerns about the stock’s overvaluation. Ferragu noted that the demand for Nvidia’s products is in line with expectations, which led to the decision to downgrade the stock. “For the first time, we think Nvidia might not exceed expectations,” said Ferragu.

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Why It Matters: Nvidia’s stock has been on a rollercoaster ride recently. The company received a rare downgrade from New Street Research on Saturday, citing concerns about the stock’s overvaluation. The analyst expressed doubts about any additional upside, stating that it would only materialize in a bull case, which is not yet certain. He also warned of a potential risk of derating if the current outlook remains unchanged.

Despite the concerns, Ives has been a vocal advocate of Nvidia’s impact on the tech industry. He previously underscored the significant influence of Nvidia’s expansion, stating that every dollar spent on the company’s chips generates $8 to $10 in the rest of the sector.

However, the stock has seen some turbulence recently. In addition to the downgrade, European Union competition chief Margrethe Vestager highlighted a significant “bottleneck” in Nvidia AI chip supply.

Price Action: Nvidia Corp’s stock closed at $125.83 on Friday, marking a decline of 1.91% for the day. In after-hours trading, the stock further decreased 0.36%. Year to date, Nvidia has shown substantial growth, surging by 161.22%, according to data from Benzinga Pro.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote