In the midst of a sharp rise, NVIDIA (NVDA.US) is one of the few short sellers speaking out.

This week, artificial intelligence leader Nvidia (NVDA.US) once again delivered explosive performance, generating record revenue and profits for three consecutive quarters, igniting the entire chip sector. After the financial report was released, Wall Street analysts were quick to raise their target prices for Nvidia. The enthusiastic sentiment caused the stock price to soar by double digits on Thursday. However, despite the overall bullish sentiment, there are voices of caution, with some analysts expressing concerns about Nvidia's overvalued stock price due to its sharp rise. Specifically, DA Davidson stated that the fiscal year 2025 will be a great year for Nvidia, but growth may not be sustained in the fiscal year 2026 and beyond, with demand potentially declining in 4-6 quarters. UBS pointed out that Nvidia's revenue growth may slow down, citing factors such as the quarterly decline in total supply for Nvidia and rising operating costs. Deutsche Bank believes that the near and medium-term fundamentals still favor Nvidia's development, but the profit potential is already fully reflected in the current valuation. DA Davidson: Demand may decline in 4-6 quarters DA Davidson pointed out that although the fiscal year 2025 is expected to be a remarkable year for Nvidia, growth may not be sustained in fiscal year 2026 and beyond. The data center business of Nvidia may start to decline steadily in some of the next 4-6 quarters. Revenue and profit expectations were significantly higher than expected, highlighting strong earnings in the fourth quarter of fiscal year 24. It is clear that Nvidia will continue to dominate in the field of artificial intelligence in the coming year, with customers expanding infrastructure and competitors catching up. However, we still believe that a decline in demand in the next 4-6 quarters may be inevitable. The big four customers (Microsoft, META, Amazon, Google) are increasing their spending to meet current demand, but their purchases are described as demand-driven, meaning they may cut back on spending once we approach a point where the capital expenditure level specially for artificial intelligence is no longer viable. Nonetheless, we maintain a neutral rating on Nvidia and have raised the target price from $410 to $620 to reflect higher cyclical peaks. This is because the big four customers are expected to increase capital spending related to artificial intelligence computing this year, and innovative products will provide additional growth drivers. The H200 is expected to launch in the next quarter, and the next generation Blackwell architecture chips will be launched later this year. UBS: Revenue growth may slow down UBS pointed out that Nvidia has been at seemingly endless heights under the hype of artificial intelligence. Nvidia's significant rise is due to the continuous strong demand for artificial intelligence computing capabilities. However, this may only be a short-term catalyst for the stock. Analyzing factors such as the quarterly decline in total supply for Nvidia and rising operating costs, the annual operating costs for 2025 are expected to increase by about 30%. The total supply (including BS inventory, purchase commitments, and pre-paid supply) is actually slightly decreasing on a quarterly basis. In the next few quarters, its revenue may slow down to near-flat levels. Currently, the same value of supply can drive more "units" in one quarter, as lead times are shortened, and Nvidia may no longer be forced to pre-order large amounts of capacity as in the past. There has been an improvement of about 100 basis points in gross margin, and stable guidance has been given based on a higher number, but it is expected to fall back by several hundred basis points in the future. While a 75% gross margin is not the end of the world, this temporary improvement is due to a very mature H100 product now accounting for the majority of revenue, as well as efficiency improvements in production and supply chain for Nvidia. As the B100 product launches, gross margin may decrease, and lower gross margins could mean fiercer competition. While weighing their concerns, UBS is also considering the fact that Nvidia's demand continues to grow: Even though the delivery time for the H100 80GB GPU has been reduced from 8-11 months to 3-4 months, indicating higher efficiency and more direct revenue. Over the past few months, Nvidia's delivery cycles have significantly shortened, which is usually not a good thing, but the demand for artificial intelligence computing capabilities remains so strong, indicating significant potential for increased shipments and revenue in the short term. Overall, UBS believes that it may be too early to take a more cautious view now, and they are slightly adjusting their expectations to reflect the potential slowdown in revenue growth, lowering the target price from $850 to $800, but maintaining a buy rating. Deutsche Bank: Profit potential already fully reflected in valuation Deutsche Bank stated that Nvidia's profit potential is already fully reflected in its valuation: As expected, Nvidia achieved billions of dollars in revenue growth for the fourth consecutive quarter, which the market had already anticipated. While not as "astonishing" as the previous few quarters, it is still impressive. Although delivery times may be shortened as supplies increase, Nvidia remains confident in the strength/quality of its demand channels, with its customer base expanding from traditional cloud service providers to numerous start-ups, sovereign entities, vertical industries, etc. Importantly, Nvidia believes that this widespread and diversified demand situation should bring sustained revenue growth in 2025 and beyond. Overall, we appreciate Nvidia's significant quarterly increase in revenue and profits and believe that the near and medium-term fundamentals are still favorable for Nvidia's development. However, based on moderately higher estimates and a moderate cyclical adjustment in 2025, we believe that Nvidia's profit potential is already fully reflected in the company's current valuation. We have raised our target price to $720, maintaining a hold rating. This article is reproduced from "Wall Street News," GMTEight editor: Chen Wenfang.