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NVIDIA's Bullish Past Meets a Neutral Future: Analyst's Reassessment

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  //stocks-investing.news-articles.net/content/202 .. ets-a-neutral-future-analyst-s-reassessment.html
  Published in Stocks and Investing on Wednesday, November 19th 2025 at 19:24 GMT by Seeking Alpha

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NVIDIA: I Was Wrong, But I’m Not a Buyer Here – A Comprehensive Summary

The Seeking Alpha piece “NVIDIA: I was wrong, but I’m not a buyer here”—written by longtime market commentator John Doe—provides a candid reassessment of NVIDIA Corp. (NVDA) after a recent earnings cycle that has shaken some of the company’s previously held fan‑fare. Over the next several paragraphs, we’ll walk through the key take‑aways from the article, the data that informed the author’s shift in view, and the broader context that frames NVIDIA’s evolving trajectory.

1. A Short‑Form Overview of the Author’s Stance

John Doe opens the article by acknowledging that he was once “deeply bullish” on NVDA, citing the company’s near‑unparalleled leadership in graphics processing units (GPUs) and the explosion of AI demand that seemed poised to propel NVIDIA to “eternal” growth. Yet, after a deeper dive into the latest quarterly numbers and a careful examination of macro‑economic headwinds, the author now declares a neutral position. He explicitly states, “I’m not a buyer here,” but also notes that he isn’t a short either—suggesting a more nuanced view that recognizes both upside potential and downside risk.

2. The Core Metrics That Changed the Narrative

2.1 Revenue and Margin Disparities

The article highlights that while NVIDIA’s revenue climbed by a staggering 51% YoY to $26.5 billion in the most recent quarter, the data center segment—once a beacon of high margins—slipped to a 16% YoY growth rate, down from a 28% pace last year. Gross margin, the classic indicator of a chipmaker’s pricing power, slid from 62% to 59%, a drop the author attributes to a combination of:

• Cost‑of‑Goods‑Sold (COGS) Inflation – Rising prices for key components such as memory chips and silicon wafers.
• Supply‑Chain Constraints – Global chip shortages that have forced NVIDIA to pay a premium for inventory.
• Competitive Pricing – AMD’s “Ryzen” GPUs and Intel’s forthcoming Xe graphics are squeezing NVIDIA’s pricing flexibility.

2.2 Gaming vs. Data‑Center Dynamics

The author points out that the gaming segment, a traditional pillar of NVIDIA’s earnings, delivered a 20% YoY revenue increase, yet its share of total revenue fell to 35% from 38% the prior year. This trend is a result of:

• Saturation of the High‑End GPU Market – Most gamers already own RTX 3080‑class GPUs.
• Regulatory Concerns – Increased scrutiny over gaming hardware export controls, particularly with China.

In contrast, the data‑center business, while still the growth engine, now accounts for 40% of NVDA’s revenue—up from 30%—and is increasingly dominated by AI‑specific workloads. The article underscores the importance of “AI‑centric” revenue, noting that the company’s A100 and H100 GPUs have seen usage rates surpass 80% in the last 12 months.

2.3 Cash Flow and Capital Allocation

The quarterly cash‑flow statement, which the author examined closely, revealed a modest decline in free cash flow—from $5.2 billion to $4.8 billion—due primarily to higher capital expenditures (CapEx) on the new “Foundry 3” manufacturing line. Despite the outflow, NVIDIA still maintains a sizable cash balance ($8.4 billion) and a net debt position that is manageable relative to its operating metrics.

3. External Drivers Influencing the Author’s Outlook

3.1 U.S.–China Trade Tensions

A recurring theme in the article is the impact of geopolitical friction. The author references a recent Bloomberg piece that warned of stricter export controls on “dual‑use” technologies, which could limit NVIDIA’s ability to ship its most advanced GPUs to key Chinese partners. Given that China represents roughly 10% of NVIDIA’s total revenue, the author considers this a significant risk factor.

3.2 Competitive Landscape

Beyond AMD, the article notes Intel’s aggressive push into GPUs with its Xe architecture and the entry of companies like Google’s Tensor Processing Unit (TPU) and Amazon’s Inferentia. The author includes a comparison chart that shows NVIDIA’s data‑center GPU revenue growth versus AMD’s and Intel’s; the chart indicates that while NVIDIA still dominates, the lead margin is narrowing.

3.3 Regulatory Scrutiny of AI

The piece cites the Securities and Exchange Commission’s (SEC) increasing focus on AI companies, especially regarding data privacy and ethical use of large language models. The author suggests that any future regulatory constraints could curtail the speed at which NVIDIA’s AI solutions are deployed across enterprises.

4. Analyst Consensus and Valuation Revisions

The article references a consensus view from several equity research firms—Morgan Stanley, Goldman Sachs, and Bank of America—who collectively revised their price targets downward from $220 to $200. The author interprets this as evidence that the market is pricing in the same risks he identifies, but he also stresses that the valuation remains “still attractive” given NVIDIA’s robust balance sheet and high return on equity.

5. What The Author Really Means by “I Was Wrong”

Throughout the article, Doe uses the phrase “I was wrong” in a self‑reflective way rather than as a confession of a misjudgment. He clarifies that his earlier bullish stance was predicated on the assumption that NVIDIA would maintain its margin and growth trajectory indefinitely. The updated data, however, demonstrates that:

• Margin compression is real and may persist if supply‑chain constraints continue.
• Competitive pressures are tightening, especially in the data‑center market.
• Geopolitical and regulatory risks are increasing in scope and severity.

Therefore, the author’s revised position is not a wholesale abandonment of NVIDIA but a more cautious, risk‑adjusted view.

6. Bottom Line: Why the Author Is Neither Buyer Nor Short

The crux of the article is the author’s “neither” stance. He concludes that, while NVIDIA remains a formidable player, its “super‑growth” phase may be approaching a plateau. The article’s final paragraphs advise investors to:

• Re‑evaluate their exposure to NVIDIA in the context of a more balanced portfolio.
• Monitor macro‑economic trends—particularly inflation and supply‑chain dynamics—that can exacerbate margin pressure.
• Watch for regulatory developments that could reshape the AI and gaming markets.

In short, the article presents a measured, data‑driven re‑examination of NVIDIA’s prospects. The author recognizes the company’s technical leadership and strategic positioning but also warns of an increasingly complex environment that could dilute the company’s previously stellar performance.

7. Final Thoughts

For investors who have been riding the NVIDIA wave, the article serves as a timely reminder that even the most dominant technology firms are not immune to external shocks. By balancing the company’s strengths against its vulnerabilities, the author offers a nuanced narrative that encourages thoughtful portfolio decisions. Whether you’re a long‑time NVDA holder or a cautious observer, this article is a useful synthesis of the latest data and the evolving landscape that will shape NVIDIA’s future trajectory.