Nvidia Faces Downgrade While Apple Struggles Amid Tariff Concerns

Santa Clara, California — Nvidia Corporation is feeling the impact of a recent downgrade from HSBC, shifting its rating from ‘Buy’ to ‘Hold’ and slashing its price target from $175 to $120. Analyst Frank Lee highlighted that Nvidia’s pricing power for its GPUs has stagnated, attributing this to waning momentum in average selling prices for their latest chip models.

Despite the predicted long-term market potential for AI and autonomous systems, Lee noted that the immediate outlook is grim, with issues including a peak in hyperscaler demand for computing resources. Nvidia has seen its stock tumble approximately 21.5% year-to-date, positioning it over 30% below its all-time high.

Nvidia’s financial metrics remain strong, exhibiting a profit margin of 55.85% and an impressive return on equity of 112.33%. However, it faces a forward price-earnings ratio of 22.7, suggesting high valuation expectations that could put pressure on its profitability amidst declining demand.

In its most recent earnings report for the quarter ending January 2025, Nvidia reported earnings per share (EPS) of $0.85, exceeding the $0.79 consensus estimate and marking its fourth consecutive quarter of beating expectations. The outlook for the next quarters suggests a slight increase in EPS forecasts, with analysts predicting $0.87 for the next report and a high of $0.97 for the following quarter.

Despite HSBC’s bearish outlook, Nvidia’s overall analyst consensus remains robust. Among 43 analysts surveyed, 37 maintain a ‘Strong Buy’ rating on the stock, while only four analysts recommend holding the stock. This indicates sustained confidence in Nvidia’s leadership within the AI computing space.

Cupertino, California — In related news, Apple Inc. is drawing scrutiny following a significant price target downgrade by Wedbush analyst Dan Ives, who lowered his forecast from $325 to $250. Ives cites ‘tariff Armageddon’ and declining demand, particularly in China, as primary reasons for the adjustment.

Shares of Apple have plunged nearly 31% from their previous peak as tensions escalate between the U.S. and China, jeopardizing Apple’s operations given that over 90% of iPhones are manufactured in China. This geopolitical instability is expected to elevate production costs while potentially dampening consumer demand.

For fiscal Q1 2025, Apple reported revenue of $124.3 billion, a modest year-over-year increase of nearly 4%. However, its success was overshadowed by an 11% decline in revenue from Greater China, dropping to $18.5 billion as competitive pressures and geopolitical tensions mounted.

Apple’s earnings report revealed a diluted EPS of $2.40, exceeding both last year’s figure and analysts’ estimates. While revenue from the Americas and Europe grew, concerns linger about the company’s ability to sustain momentum in Asian markets.

The consensus among 36 analysts for Apple remains a ‘Moderate Buy’, despite the recent downgrade from Ives. Analysts maintain an average price target of $250, indicating a possible 42% upside, while acknowledging the risks posed by tariffs and fluctuating demand in key markets.