According to analyst Gil Luria, Nvidia may encounter a significant obstacle to its growth next year if the demand for GPUs decreases. Luria suggests that there is a possibility that Nvidia may not experience any growth in 2026, which could lead to a potential decline in the company's stock by as much as 48%.

Luria, who leads the technology research at DA Davidson, has expressed doubts about Nvidia's rapid increase in stock value. He believes that the company's peak performance might be in the past as there are concerns that the demand for Nvidia's AI chips, particularly its GPUs, could stagnate, resulting in a negative impact on the stock.

Despite this cautious view, Luria maintains a "neutral" rating on Nvidia stock and a price target of $135. In his pessimistic scenario, he anticipates a decline in revenue and earnings in 2026 due to reduced AI spending by key customers like hyperscalers, while also facing challenges in attracting new customers to purchase their chips. In such a case, the stock could drop as low as $60 per share.

Luria highlighted various obstacles Nvidia must overcome for its chip sales to grow, such as sustaining demand in China amid economic slowdowns and import restrictions, as well as smaller customers needing capital to support their chip purchases. Additionally, he emphasized the necessity for more significant applications of AI to justify the current levels of investment in Nvidia.

Luria's assessments coincide with a significant week for Nvidia, with the company hosting its annual AI conference and providing updates on new chip developments. Despite these advancements, Nvidia stock has experienced a 16% decrease year-to-date, reflecting investor skepticism towards the company's growth prospects.