Nvidia's (NVDA) growth metrics aren't impressing Wall Street like they used to.
Nvidia reported earnings on Wednesday which showed the company's earnings and revenue grew more than 100% from the prior year. But it also marked the company's slowest year-over-year revenue growth in a year, 122%, and the rate of growth compared to the prior year was less than half what Nvidia reported in the first two calendar quarters of 2024.
Shares were down nearly 4% Thursday afternoon.
And this growth slowdown, D.A. Davidson managing director Gil Luria told Yahoo Finance, is the chief concern with the stock right now and why he maintains a Neutral rating on the AI juggernaut.
"Next year we're going to have, at the very least, decelerating growth and possibly at some point, revenue declines," Luria said.
"Where if you look at consensus estimates, sell-side estimates, they are for the growth to continue at very, very high rates that are very hard to justify considering Nvidia's revenue is these other companies' margins."
At some point, Luria argued, the big tech hyperscalers like Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL, GOOG), and Meta (META) are going to slow their spending. And given they represent the lion's share of Nvidia's current AI chip sales, that'd likely be a headwind to future revenue growth.
"The estimates for next year and the year after that are starting to get way, way out of control," Luria said.