Nvidia gets rare sell rating as Seaport says AI fully priced in

(Bloomberg) — Nvidia Corp. (NVDA) received a rare sell rating on Wednesday, with Seaport Global Securities warning that the benefit of artificial intelligence has been “priced in for now.”

The chipmaker’s largest customers “are all looking to design their own chips,” and “it’s likely that AI budgets slow in ’26,” analyst Jay Goldberg wrote in a note.

Nvidia fell 2.3% Wednesday, following weak preliminary results from Super Micro Computer Inc., another beneficiary of investor interest in all things AI. The stock is participating in a broad-based equity decline.

Shares of Nvidia have dropped more than 20% this year, lagging the Philadelphia Stock Exchange Semiconductor Index, which is down 17%.

The sell rating stands in stark contrast to the overwhelmingly positive consensus surrounding Nvidia, which has become the poster child for AI over the past few years. Roughly 88% of the analysts tracked by Bloomberg recommend buying the stock, while 11% have the equivalent of a hold rating. Seaport has the only sell.

There have been growing concerns about whether the heavy spending on AI is sustainable. The four biggest spenders on AI infrastructure — Microsoft Corp., Amazon.com Inc., Alphabet Inc. and Meta Platforms Inc. — are expected to spend more than $300 billion in their current fiscal years.

However, Microsoft has pulled back on data center projects around the world, with some of the pause coming abruptly. There have also been reports that Amazon’s web services business is pausing some data center leases, although executives have pushed back.

As part of the initiation, Goldberg issued a $100 price target on Nvidia, the lowest on the Street, though it only implies modest downside to its current price of around $106. The average 12-month target price for the stock sits at about $162, roughly 50% above where the stock currently trades.