Wall Street’s Top Nvidia Bull Sounds Alarm: Shares Are 'Modestly at Risk' Amid Blackwell Setbacks

Wall Street's leading Nvidia bull has raised concerns over the stock's future, citing overheating Blackwell systems and a shaky semiconductor sector. With earnings on the horizon, investor sentiment grows increasingly cautious.

Nvidia Faces Mounting Pressure Ahead of Earnings Report

According to Jordan Klein of Mizuho, the semiconductor industry darling and tech rally player Nvidia is facing increasing pressure in the days leading up to its much-anticipated earnings announcement.

Notable Nvidia bull Klein wrote to investors, stating that the company's stock is "modestly at risk" owing to increased market pressures and investor actions.

A combination of industry-wide decline and worries about Nvidia's newest Blackwell systems—which have allegedly experienced overheating problems—were cited by Klein.

Overheating Blackwell Systems Add to Nvidia’s Woes

"Futures indicated higher this morning, but the negative news out on overheating issues in Nvidia's new Blackwell systems has me incrementally worried about Semis," said Klein.

"There is just so much quant, passive and fast momentum money swirling around in markets these days and I assume that style sells first, asks questions later." He cited larger market factors as the reason he doubts early gains in tech stocks may continue.

The semiconductor industry was already feeling the heat before this week's dismal guidance from Applied Materials added fuel to the fire.

Semiconductor Sector Struggles Amplify Concerns

"Friday's trading action was just a terrible sign for the Tech sector," Klein pointed out. He noted that investors are now seeking "any and every reason to sell," and that semiconductor companies are especially susceptible to this trend.

Given Nvidia's position as the market's most-followed stock, Klein stressed the increased importance of the company's next earnings, Investing.com reports.

"A terrible reaction to a mixed print and guide from semi cap AMAT puts even more focus and pressure on Nvidia to halt the decline with a strong enough beat and guide," according to him.

Nvidia's Valuation Sets a Higher Threshold

The present value of Nvidia, he added, sets a greater threshold than in prior quarters.

While Klein is bullish on Nvidia's future, he did warn of the dangers of short-term negative pressure, particularly from retail and momentum investors who "purely react to headlines and initial stock moves."