In recent weeks, a wave of concern has swept across Wall Street regarding the future of Nvidia's stock amid its spectacular riseOnce regarded as a safe bet driven largely by the burgeoning artificial intelligence (AI) sector, analysts are now sounding alarms about a potential downturnThis drastic shift in sentiment is not merely based on speculation; it stems from the convergence of substantial gains in Nvidia's stock combined with new predictions that suggest a looming correction.

Nvidia's stock price has caught the attention of investors and analysts alikeSince the onset of the AI boom, Nvidia has seen its shares skyrocket, with prices recently surpassing the $1,000 mark, closing at an all-time high of $1,064.69, marking a staggering increase of 115% year-to-date and a total market valuation of approximately $2.62 trillionSuch compelling numbers have certainly positioned Nvidia as a darling of the tech sector.

However, caution is now warranted

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Gil Luria, an analyst at DA Davidson, has issued a stark warning that Nvidia's relentless rise poses significant risks, projecting that the stock may plummet by as much as 20% in the near futureLuria's concerns revolve around the sustainability of Nvidia's growth, which he believes may falter over the next 18 monthsNotably, he forecasts a dip in the stock price to around $900 by 2026, reflecting a cautious perspective amidst what has been an exhilarating stock run.

The roots of these concerns can be traced to Nvidia's major clientsGiants like Meta, Google (Alphabet), Amazon, and Tesla are developing their own AI chips, threatening Nvidia's market position and reducing their dependency on its productsLuria has consistently maintained that the moment these tech powerhouses withdraw their investments, the outlook for Nvidia’s stock could shift drasticallyAdditionally, renowned investor Rob Arnott has made it clear that he believes Nvidia's stocks exhibit traits of a bubble, underscoring the elevated price-to-sales ratios that are suggestive of overvaluation.

Nvidia’s remarkable performance, particularly the record revenues reported in its latest fiscal quarter (with revenues hitting $26 billion), had previously exceeded even the most optimistic Wall Street projections

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This apparent disconnect between the reality of Nvidia's financial results and the projected risk has left many investors ambivalent.

Moreover, the company’s stock surged by an incredible 628.7% since the beginning of 2023, fueled by exceptional financial resultsNvidia’s revenue growth of 262% year-over-year combined with a net profit leap of 628% unveils a concerning reality: while the current performance justifies the soaring stock prices, the sustainability of such growth is not guaranteed.

Yet, in contrast to the cautionary voices, many institutional investors continue to express confidence in NvidiaFor instance, Vanguard holds an impressive 8.53% stake in the company, marking it as its largest institutional shareholder while BlackRock retains 7.29%. Pushing against the tide of analyst skepticism, this persistent institutional support suggests a belief in Nvidia's longer-term potential despite the volatility.

Others point to signs of positivity surrounding the company

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Recently, Nvidia announced a 1-for-10 stock split scheduled to take effect in JuneHistorically, stock splits have been catalysts for increased interest from retail investors, even if the actual market cap remains unchangedFor instance, past analyses have indicated that companies undergoing stock splits tend to outperform the broader market averages over a 12-month period.

Furthermore, the impending stock split could pave the way for Nvidia to join the prestigious Dow Jones Industrial AverageCurrently, Nvidia’s hefty stock price is a barrier to inclusion—its stock price sits significantly higher than many components of the indexA post-split price of approximately $106 per share could remedy this obstacle, making Nvidia a candidate that matches all criteria for Dow inclusion: robust reputation, growth trajectory, and significant investor interest.

Despite the bearish forecasts from several analysts, Nvidia's strong brand equity and market positioning cannot be easily dismissed

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