Investing.com -- A note from DA Davidson on Thursday suggests that 2025 could mark the peak year for Nvidia (NASDAQ:NVDA) stock as the firm continues to express caution regarding the company's long-term outlook.
Despite Nvidia’s strong performance in the past year, DA Davidson remains skeptical about its ability to meet 2026 expectations, labeling its forecast for that year as "street low."
When DA Davidson initiated coverage of Nvidia in January 2024 with a Neutral rating, it highlighted concerns that positioned the firm among the most cautious on Nvidia’s future.
Reflecting on this year, DA Davidson continues to hold its Neutral stance and maintains a $135 target for the stock, which represents a 35x multiple.
The analysts note, "We remain cautious on NVDA’s ability to meet consensus expectations for CY2026 and beyond," emphasizing that while Nvidia may see a peak in 2025, the company faces challenges in sustaining growth.
Key concerns for Nvidia include supply-side disruptions, particularly the limits on sales to China and ongoing issues with Blackwell quality.
However, DA Davidson points out that these disruptions could "actually prolong the cycle," suggesting that the supply issues may keep demand strong in the short term.
Despite Nvidia’s current success, DA Davidson remains cautious, expecting a slowdown in 2026.
“Shorter-term, we expect investors to focus on the supply-side disruptions, namely limits on sales to China as well as Blackwell quality issues,” said the firm, adding that the “longer-term driver will remain demand.”