Key Takeaways
- NVDA shares finished 4.42% lower at $225.32 on May 15, triggering a broader semiconductor selloff
- UBS issued a caution noting that 8 of the top 12 semiconductor firms represent “extremely crowded long” trades
- TD Cowen boosted its NVDA price target from $235 to $275, pointing to over $1 trillion in combined Blackwell and Rubin orders
- BofA elevated its price target to $320 while Wells Fargo moved to $315, maintaining positive stances
- Nvidia’s Q1 FY2027 results arrive Wednesday, May 20 ā market watchers seek confirmation of sustained Blackwell momentum
As Nvidia approaches Wednesday’s highly anticipated earnings announcement, the stock faces downward momentum, declining 4.42% to settle at $225.32 on May 15. Yet this pullback hasn’t dampened Wall Street’s enthusiasm.
The decline extended across the broader chip sector, not just Nvidia. Micron tumbled 6.62%, Intel retreated 6.18%, AMD slipped 5.69%, Broadcom shed 3.32%, and Marvell fell 3.12%.
However, context matters. These semiconductor stocks have delivered extraordinary gains recently. From March 30 forward, Intel rocketed 164% higher, Micron climbed 125%, AMD advanced 116%, Marvell jumped 101%, and Nvidia itself added 36%. Such impressive rallies naturally invite some profit-taking.
UBS highlighted positioning concerns in a recent analyst note. Their research identified 8 of the world’s 12 largest semiconductor companies by market capitalization as extremely crowded long positions. The firm also cautioned that hyperscalers’ transition from asset-light to asset-heavy infrastructure models may pressure cash flow returns on investment during the upcoming three years.
UBS specifically referenced Nvidia’s projected CFROI of 82% for this year. Their historical analysis reveals a sobering reality: merely 0.09% of worldwide stocks maintain returns exceeding 50% for five consecutive years, and just 0.02% sustain such performance for a full decade.
Wall Street Maintains Confident Outlook Before Results
Notwithstanding UBS’s measured stance, most prominent analysts continue supporting Nvidia.
TD Cowen’s Joshua Buchalter ā who holds the 69th position among 12,243 Wall Street analysts with a 72% accuracy rate ā increased his price objective to $275 from $235. He highlighted that Nvidia’s leadership team anticipates its combined Blackwell and Rubin order backlog surpassing $1 trillion, which Buchalter interprets as potential upside beyond current Street estimates. He projects Nvidia will exceed its quarterly revenue guidance by $1 billion to $2 billion.
Bank of America’s Vivek Arya, positioned 80th with a 65% success rate, upgraded his target to $320 from $300, maintaining Nvidia as his preferred sector selection. His valuation applies a 28x price-to-earnings ratio to his 2027 forecast, fitting within Nvidia’s historical forward P/E band of 25 to 56. BofA also projects the AI data-center sector could expand to $1.7 trillion by 2030.
Wells Fargo increased its target to $315 from $265.
The Post-Earnings Paradox
Nvidia confronts an unusual pattern: shares frequently decline following robust earnings performances despite beating expectations.
CEO Jensen Huang acknowledged this peculiar dynamic following Q3 FY2026 results. “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 catch-22 narrative creates challenging sentiment conditions.
Deutsche Bank’s Ross Seymore recently cautioned that Nvidia’s anticipated growth trajectory through the next two years seems already embedded in current valuations, diminishing the probability of a meaningful positive surprise.
Nvidia’s previous quarterly announcement featured record-breaking revenue of $68.1 billion alongside a non-GAAP gross margin of 75.2%.
BofA identifies potential headwinds including gaming segment softness, competitive pressure from custom silicon solutions, China-related export limitations, unpredictable enterprise purchasing patterns, and heightened regulatory attention.
Wednesday’s report will be decisive.
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