Nvidia Stock Under Pressure — But Analysts at Big Banks Stay Firm

Nvidia (NVDA) shares have experienced pressure since FQ2 results due to investor concerns over perceived growth cooling and increased inventory. However, J.P. Morgan's Harlan Sur and Citi's Atif Malik counter these worries, citing management's confirmation that AI demand continues to outpace supply, maintaining multi-quarter lead times, and that the inventory build was strategic for a strong Blackwell Ultra (BWU) ramp, with most already shipped. Analysts project robust AI market growth, a smooth transition to GB300, and anticipate the Vera Rubin platform's 2026 launch, leading to reiterated Buy ratings and a consensus "Strong Buy" outlook with significant upside.

Analysis

Despite recent stock pressure on Nvidia following FQ2 results that fueled concerns of a growth peak, top-tier analyst commentary suggests these fears are unsubstantiated. J.P. Morgan highlights that demand continues to outpace supply, with product lead times still measured in quarters, indicating the AI demand cycle remains robust more than two years into the spending cycle. The firm's management clarified that the notable 33% sequential increase in FQ2 balance sheet inventory was a deliberate strategy to support a stronger ramp for the Blackwell Ultra (BWU) platform in FQ3, and that most of the $8.7 billion in finished goods have already shipped in the current quarter. Shipments remain stable at approximately 1,000 racks per week, with a significant mix shift toward BWU, which accounted for roughly 50% of the Blackwell mix in FQ2. Looking ahead, supply chain checks from Citi point to AI market growth exceeding 40% in 2026 and a "massive ramp" for the margin-accretive GB300 in Q4. Furthermore, Nvidia has reaffirmed that its next-generation Vera Rubin platform is on track for a C2H26 launch, with all chips already taped out at TSMC. This positive outlook is reflected in the strong consensus Wall Street rating, with 34 Buys and an average price target suggesting a potential 26.5% upside.

Key Decisions for Investors

• Investors could view the recent stock weakness, driven by now-clarified concerns over inventory and growth pace, as a potential entry point, but should remain aware that the stock may consolidate in the near term after its significant run-up.
• Attention should be paid to near-term catalysts that could drive the next leg up, including the 'massive ramp' of the margin-accretive GB300 platform in Q4 and any strategic updates from the CEO's GTC keynote on October 28.
• The confirmed C2H26 launch timeline for the Vera Rubin platform provides long-term roadmap visibility, supporting a bullish thesis for investors with a multi-year horizon that extends beyond the current Blackwell product cycle.