NVIDIA (NASDAQ:NVDA) saw its rating lowered from Buy to Hold by HSBC analysts, who also reduced the price target to $120 from $175, citing concerns about fading pricing momentum in the GPU market.
HSBC had previously turned bullish on NVIDIA in April 2023, betting that the company’s dominance in AI chips and its ability to command premium prices were underestimated. For much of the past two years, that thesis held up as NVIDIA surged on the back of strong demand for AI-related hardware.
Now, however, the story appears to be shifting. According to the note, HSBC sees no meaningful increase in average selling prices (ASP) between NVIDIA’s new-generation B200 and B300 GPUs, or between the GB200 and GB300 NVL72 rack architectures, suggesting that the company’s once-powerful pricing advantage may be plateauing.
The analysts also pointed out that NVIDIA’s forthcoming Vera Rubin platform doesn’t deliver notable performance improvements in terms of GPU density, sticking with 72 GPUs per rack—a number unchanged since the Blackwell generation. A substantial leap in specifications may not come until the Rubin Ultra release in 2027, potentially limiting near-term growth catalysts.
With pricing tailwinds losing steam and product specs leveling off, HSBC believes that earnings upside may now be capped, prompting the downgrade and lower valuation outlook.