Nvidia, a leading technology giant, has seen a remarkable rise in its stock price over the past year, with shares up 212% to start 2025. However, not everyone is optimistic about the company’s future. Journalist and hedge fund manager Doug Kass has predicted that Nvidia’s golden days are coming to an end due to the increasing electricity demand of data centers, leading to strict taxation.
Kass argues that power outages and rising natural gas prices will further increase inflationary pressure on the public, resulting in subsidized energy prices for households and increased taxes on data centers. This shift in focus from consumers to businesses cutting losses will benefit tech integrators and consultants but be detrimental to hyperscalers like Nvidia.
On the other hand, analysts are bullish on Nvidia stock, with a “Strong Buy” consensus rating and a mean price target of $175.55. Despite beating analyst estimates in its third-quarter results, investors are cautious about the company’s below-par Q4 outlook.
Nvidia’s data center business reported a 112% year-over-year jump to $30.8 billion, driving revenue growth and increasing free cash flow by 138%. However, the AI company anticipates modest sequential growth of 7% in its Q4 revenue, reflecting concerns about the lack of a steady revenue stream from generative AI.
The stock’s future trajectory remains uncertain, with analysts divided on whether Nvidia’s bullish or bearish predictions will prevail. As of now, shares are up 11% in less than a week to start 2025, but it remains to be seen whether they can sustain this momentum.
Source: https://www.barchart.com/story/news/30331631/nvidia-stock-warning-this-hedge-fund-manager-thinks-nvda-will-fall-to-50-in-2025