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BTIG Analyst Warns Nvidia Stock Valuation

Nvidia's stock surge has led analysts to advise caution on valuation concerns.

July 18, 2025 at 05:41 PM

Nvidia Stock (NVDA) May Be ‘Overheating,’ Says BTIG Analyst

Nvidia has seen a remarkable increase in stock value, prompting caution from analysts.

BTIG Analyst Warns Nvidia Stock May Be Overvalued

Nvidia's stock has increased by 84% in just four months, making it the world's most valuable company again. However, some analysts advise caution as the stock's relative strength index indicates overbought conditions. Jonathan Krinsky from BTIG highlighted this drawing attention to potential overheating in investor sentiment. Nvidia’s recent gains are partly due to a U.S. policy change allowing chip sales to China that could recover up to $15 billion in revenue. Nevertheless, some investors such as James Abate have begun to sell shares, expressing concern over Nvidia’s high valuation and the cyclical nature of the AI industry. Currently, Nvidia's stock trades at roughly 34 times its expected earnings for the next year, making it important for observers to monitor forthcoming earnings reports from major tech giants that significantly impact Nvidia’s performance.

Key Takeaways

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Nvidia's stock is up 84% in four months, reclaiming its leading market position.

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Analysts are cautious about Nvidia's current stock valuation being overbought.

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The company's recent gains are supported by favorable U.S. policy changes.

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Investors are beginning to trim their Nvidia positions due to high valuations.

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Nvidia trades at 34 times expected earnings, raising concerns about future pricing.

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Upcoming earnings reports from major tech firms will impact Nvidia's stock performance.

"Nvidia’s relative strength index topped 80, suggesting a stock is overbought."

This highlights the potential risk associated with the stock's recent surge.

"Some investors worry that the market may underestimate how cyclical the AI business could become."

This emphasizes concerns about sustainability in Nvidia's growth trajectory.

The rapid rise in Nvidia's stock poses significant questions about sustainability. While strong tailwinds, like policy changes, support its growth, the soaring valuation introduces risk. The warning from analysts reflects larger market trends, suggesting that investors might need to reassess their positions amid a changing landscape. With AI growing more cyclical, understanding how companies like Nvidia fit into this environment is essential. Upcoming earnings from tech giants may serve as critical indicators for Nvidia’s trajectory, either justifying its current value or signaling potential declines.