BlockBeats News, July 25th. NVIDIA's stock price has only risen by 10% this year, becoming the most disappointing heavyweight stock in the sector against the backdrop of the Philadelphia Semiconductor Index soaring 71%. Morningstar analyst Brian Colello pointed out that the current price of around $212 implies that NVIDIA will have almost no growth after 2027. The analyst believes that NVIDIA's fair value is close to $280, equivalent to 16 times the expected sales for the fiscal year 2029.

NVIDIA's current EBITDA-based forward P/E ratio is around 17 times, far below the five-year average of 36 times, and at its lowest range since July 2021. Competitor AMD has a forward P/E ratio of 53 times, with a year-to-date increase of 142%. John Belton, a fund manager at Gabelli Funds, stated that investors are chasing targets with the most significant supply-demand imbalance and untapped growth opportunities, neither of which NVIDIA currently meets.

The bearish thesis on NVIDIA is based on the emergence of challengers and the scale ceiling: startups like SambaNova and Cerebras have launched self-developed chips, while Google, Amazon, Meta, Microsoft, OpenAI, and Anthropic are all advancing their in-house chip plans. AMD's first AI server rack system, Helios, is set to ship later this year, directly competing with the Grace Blackwell and Vera Rubin series.

The bullish case for NVIDIA, on the other hand, argues that NVIDIA's revenue is expected to grow by 42% to $560 billion in the next fiscal year and another 23% in the following year, far exceeding AMD's estimated $78 billion volume in 2027. The more than double valuation premium is difficult to explain with just a growth differential. More crucially, NVIDIA's market share in the inference chip market has actually increased; its countercyclical resilience is also underestimated—if AI investment cools down, many companies that have just ventured into chip self-development may abandon it and return to the NVIDIA ecosystem, making the impact of an AI winter on NVIDIA potentially less than on emerging chip designers. Colello expects NVIDIA's annual revenue and adjusted EPS growth rates to exceed 45% by the fiscal year 2029, believing the market has already overly priced in the competitive threats.