Seaport Reiterates Sell Rating On Nvidia Stock Over Data Center Infrastructure Bottlenecks

Key Stats for Nvidia Stock

• Price change for Nvidia stock in last 6 months: 1%

• $NVDA Stock Price as of Oct. 23: $211

• 52-Week High: $243

• $NVDA Stock Price Target: $329

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What Happened?

Seaport Research kept its Sell rating on Nvidia (NVDA:NASDAQ) and its $180 price target. Analyst Jay Goldberg said Nvidia faces rising pressure from rivals and growing financial risk from its investment commitments.

Goldberg says Nvidia added about $250 billion in commitments last quarter, which goes toward securing components and supporting data center construction.

It ties the company more closely to the AI buildout.

He also pointed to a separate financing plan. Nvidia, six private equity firms, and banks are working on a platform that could provide about $500 billion in funding. It could reach $1 trillion.

Nvidia would not carry the whole obligation, but Goldberg sees its role as central.

His worry is simple. These deals are built to speed up growth, but they could widen losses if demand for computing weakens.

Companies that lean on Nvidia’s support could struggle in a downturn, adding strain just as Nvidia’s own sales and cash flow decelerate.

Goldberg also questioned whether helping customers and locking in supply might compete for the same cash.

The latest quarter shows the other side of the story.

• Nvidia reported revenue of $96 billion, more than double last year.

• Data center revenue hit $89 billion.

• Management guided to $108 billion in revenue for Q3.

• It also expects revenue to grow about 70% in fiscal 2028.

Management knows investors are asking about its deals and said some will call them circular financing, but it sees them differently. It says its risk is limited because its chips can be redeployed to other customers.

Nvidia expects gross margin to fall to 74% in Q3 and bottom at 71% to 72% in Q4 as management blamed rising memory costs.

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What the Market Is Telling Us About Nvidia Stock

The debate around Nvidia stock is no longer about demand. Management says its supply is the limit, and the question is how much risk Nvidia takes on to keep that growth going.

Seaport’s call is a cautious one as it says the financing web around Nvidia stock could cause trouble if the AI cycle cools.

For now, the company has strong numbers and a long order book.

Seaport is asking investors to look at what happens if that changes. Anyone following Nvidia stock should watch how these commitments grow from here.