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Facing new "geopolitical uncertainties" and very rapidly increasing competition, Nvidia's (NVDA) profits could rise more slowly than Wall Street's analysts, on average, are projecting, warned Ali Mogharabi, the Senior Equity Analyst of West End Capital Management.
In light of these points, Mogharabi suggested that investors "wait for things to settle and (to) get more clarity about geopolitical issues" before buying NVDA stock.
Geopolitical Difficulties
Due to restrictions on the chips that NVDA can sell to China, incentives are being created for China to invest more money in developing its own AI chips, Mogharabi asserted. This situation "does not necessarily help Nvidia," he stated.
Stepped-Up Competition
Nvidia's competition is "growing very, very quickly," with the large cloud-infrastructure companies making their own AI chips, the investor stated. Another tough competitor is China's Huawei which has developed semiconductors that are "pretty comparable to Nvidia's (new) Blackwell 200" chips, according to Mogharabi.
The Recent Price Action of NVDA Stock
In the last month, the shares have fallen 18%, while they are down 30% in the last three months.
While we acknowledge the potential of NVDA, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.