Dow Hits Another Record, S&P 500, Nasdaq Struggle As Investors Shrug Off Nvidia Shares Drop

Nvidia’s ( NVDA ) growth numbers aren’t impressing Wall Street like they used to.

Nvidia reported earnings on Wednesday, which showed that the company’s earnings and revenue were up more than 100% from a year earlier. But it also marked the company’s slowest year-over-year revenue growth of 122 percent, and the year-over-year growth rate was less than half of what Nvidia reported in the first two calendar quarters of the year 2024.

Shares were down nearly 4% Thursday afternoon.

And that slowdown in growth, DA Davidson CEO Gil Luria told Yahoo Finance, is the main concern about the stock right now and why he maintains a Neutral rating on AI.

“Next year we’re going to have, at the very least, a decline in growth, and possibly at some point, revenues will decline,” Luria said.

“Where if you look at consensus estimates, sales estimates, they’re for growth to continue at very, very high rates that are very hard to justify given that Nvidia’s revenue is the margins of these other companies. “

At some point, Luria argued, big tech hyperscalers like Microsoft ( MSFT ), Amazon ( AMZN ), Alphabet ( GOOGL , GOOG ) and Meta ( META ) will slow their spending. And given that it accounts for the lion’s share of Nvidia’s current AI chip sales, that would likely be a headwind for future revenue growth.

“The estimates for next year and the year after are starting to get out of hand,” Luria said.