Nvidia Corporation (NASDAQ:NVDA) has been one of the hottest stocks in the market, thanks to its leadership in graphics processing units (GPUs) and advancements in artificial intelligence (AI). However, a bold Nvidia stock forecast from hedge fund manager Doug Kass suggests that the company’s meteoric rise may soon face significant headwinds.
Nvidia Stock’s Current Performance
Nvidia has been on a remarkable run, achieving a valuation of $3.71 trillion and becoming one of the most valuable companies globally. In the first week of 2025 alone, Nvidia stock rose by 11%, adding to its 212% gain over the past year.
The company’s success has largely been driven by the surging demand for AI technologies. Its GPUs are essential for powering AI models, data centers, and high-performance computing applications. Nvidia has also benefited from the growing adoption of generative AI, which has become a key driver of its revenue growth.
Despite these achievements, some experts are beginning to question whether Nvidia can maintain its current momentum.
Doug Kass’ Bearish Nvidia Stock Forecast
Hedge fund manager and journalist Doug Kass recently shared his outlook for Nvidia as part of his 2025 predictions. According to Kass, several factors could lead to a sharp decline in Nvidia stock price, potentially dropping it as low as $50 per share.
Kass’ prediction hinges on the increasing demand for electricity to power data centers. He argues that governments may struggle to meet this demand, leading to higher taxation on data centers to offset energy costs. This, in turn, could impact Nvidia’s customers and reduce demand for its products.
Kass also foresees rising natural gas prices (NYSE:NGG25) contributing to inflationary pressures. He predicts that governments will prioritize subsidizing household energy costs, leaving businesses, including data centers, to bear the brunt of higher taxes and energy expenses.
In addition to these economic pressures, Kass believes that the hype around generative AI may not translate into sustained revenue growth. Without a “killer application” that generates consistent income, hyperscalers—large cloud providers—may scale back their spending on AI infrastructure. As a result, Kass predicts that Nvidia’s revenue growth will slow, causing its stock price to tumble.
Nvidia’s Q3 Earnings Beat Expectations
Despite Kass’ bearish outlook, Nvidia’s recent financial performance has been impressive. The company reported its third-quarter results on November 20, surpassing analysts’ estimates.
Nvidia posted a profit of $19.31 billion, or $0.81 per share, beating the consensus estimate of $0.75 per share. Revenue for the quarter came in at $35.08 billion, representing a 93.6% year-over-year increase. The company’s data center business was a key driver of growth, with revenue jumping 112% year-over-year to $30.8 billion.
Free cash flow also saw a significant increase, rising 138% year-over-year to $16.8 billion. However, Nvidia’s Q4 outlook left some investors concerned. The company projected revenue of $37.5 billion, plus or minus 2%, which, while above the consensus estimate of $37.1 billion, reflects a more modest sequential growth rate of 7%.
Analyst Sentiment Remains Positive
Despite Kass’ warning, most analysts remain bullish on Nvidia stock. The company holds a “Strong Buy” consensus rating from analysts, with a mean price target of $175.55. This reflects an upside potential of 16.76% from its current levels.
Out of 43 analysts covering Nvidia, 36 have issued “Strong Buy” ratings, three have given “Moderate Buy” ratings, and four have rated it as a “Hold.”
Conclusion: Can Nvidia Weather the Storm?
The Nvidia stock forecast from Doug Kass has sparked a debate about the company’s future. While Nvidia has shown impressive financial performance and continues to lead in AI innovation, potential economic and regulatory challenges could impact its growth trajectory.
For investors, the key question is whether Nvidia can continue to capitalize on the AI boom or if external pressures will weigh on its stock price. With analysts remaining largely positive, the coming months will reveal whether Kass’ prediction holds weight or if Nvidia will defy the odds once again.
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