Nvidia (NVDA, Financial) shares slid north of 6.5% Thursday after HSBC downgraded the stock from Buy to Hold, citing concerns that the chipmaker's pricing strength in the AI GPU space may be starting to fade.
Top-rated analyst Frank Lee said Nvidia has seen strong momentum over the past two years, largely thanks to premium pricing on its AI GPUs. But that dynamic appears to be shifting. Lee pointed out that Nvidia's latest products — including the B300 GPU and GB300 rack system — aren't commanding significant price hikes over earlier versions.
He also flagged that the company's upcoming Vera Rubin system doesn't expand GPU count per rack, sticking with 72 units — the same as the current Blackwell system. Any increase won't come until Rubin Ultra arrives in 2027.
Due to these concerns, HSBC cut its price target on Nvidia from $175 to $120 and lowered both revenue and earnings estimates for fiscal 2026.
Still, Lee isn't walking away from the stock completely. He noted that longer-term opportunities in robotics and autonomous AI could eventually drive growth. But in the near term, Nvidia may face slower demand from cloud providers or a pause in large-scale AI orders from customers like DeepSeek.
