Key Takeaways
- NVDA shares declined 4.42% to $225.32 on May 15, pulling down semiconductor peers across the board
- UBS cautioned that 8 out of 12 major chip companies represent “extremely crowded long” trades
- TD Cowen boosted NVDA’s price target from $235 to $275, highlighting a trillion-dollar-plus Blackwell and Rubin order backlog
- BofA increased its target to $320 while Wells Fargo moved to $315, maintaining positive outlooks
- Q1 FY2027 results arrive Wednesday, May 20 — market wants confirmation that Blackwell momentum continues
Nvidia approaches Wednesday’s financial results under selling pressure, with shares falling 4.42% to $225.32 as of May 15. The decline hasn’t dampened Wall Street’s enthusiasm.
The selloff extended beyond Nvidia alone. Chip stocks broadly retreated, with Micron shedding 6.62%, Intel losing 6.18%, AMD declining 5.69%, Broadcom sliding 3.32%, and Marvell decreasing 3.12%.
Yet these equities have delivered extraordinary gains recently. From March 30 onward, Intel rocketed 164% higher, Micron climbed 125%, AMD advanced 116%, Marvell jumped 101%, and Nvidia itself rallied 36%. Profit-taking was inevitable after such moves.
UBS highlighted overcrowding concerns in a recent research note. Their examination revealed 8 among the 12 largest global semiconductor firms by market capitalization represent extremely crowded long bets. The firm also cautioned that hyperscalers’ transition from asset-light to asset-heavy strategies might compress cash flow returns on invested capital during the coming three years.
They specifically cited Nvidia’s CFROI, projected to reach 82% this year. The worry: historical data shows merely 0.09% of worldwide equities maintain returns exceeding 50% across five years, with only 0.02% sustaining such levels for ten years.
Wall Street Maintains Positive Stance Ahead of Report
Notwithstanding UBS’s reservations, leading analysts continue supporting Nvidia.
TD Cowen’s Joshua Buchalter — positioned 69th among 12,243 Wall Street analysts with a 72% accuracy rate — increased his price objective to $275 from $235. He observed that Nvidia’s leadership perceives its Blackwell and Rubin order book surpassing $1 trillion, representing potential upside versus current Street expectations. He anticipates Nvidia will exceed quarterly revenue guidance by $1 billion to $2 billion.
Bank of America’s Vivek Arya, ranked 80th with a 65% accuracy record, elevated his target to $320 from $300, maintaining Nvidia as his preferred sector selection. His valuation applies a 28x price-to-earnings ratio on his 2027 projection, falling within Nvidia’s historical forward P/E band of 25 to 56. BofA additionally forecasts the AI data-center segment potentially expanding to $1.7 trillion by 2030.
Wells Fargo increased its objective to $315 from $265.
The Post-Earnings Reaction Pattern
Nvidia faces an unusual situation: shares frequently decline even following impressive earnings performances.
CEO Jensen Huang commented on this pattern after Q3 FY2026 numbers. “If we delivered a bad quarter, it is evidence there’s an AI bubble. If we delivered a great quarter, we are fueling the AI bubble.” This framing creates difficult sentiment dynamics.
Deutsche Bank’s Ross Seymore recently cautioned that Nvidia’s anticipated expansion during the next two years seems already incorporated into the current valuation, complicating meaningful positive surprises.
Nvidia’s previous quarterly disclosure revealed record sales of $68.1 billion alongside a non-GAAP gross margin of 75.2%.
BofA’s identified downside scenarios encompass gaming weakness, custom silicon competition, China export limitations, unpredictable enterprise purchasing patterns, and heightened regulatory attention.
Wednesday’s report will be crucial.
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