By coinnews 
00:00 Brian Sozzi
This is Yahoo Finance. I’m executive editor Brian Sozzi and also the host of the Opening Bid podcast. Arguably, the most important magnificent seven member, you guessed it, folks, Nvidia reports earnings this week and the usual hype is very hard to miss. Stock is up a sizzling 40% over the past year, but down this year due to concerns on AI demand and China chip export controls. But analysts are staying overwhelmingly bullish on one of their favorite stocks. 87% have a buy rating according to analyst recommendation data found on Yahoo Finance and the average price target is around $162 implying major 25% upside from current price levels. But with the stock trading at a pricey 31 times forward earnings and up more than 700% over the past three years, pros, I chat up on Wall Street, are beginning to ask a key question. How much of Nvidia’s AI dominance is already priced in? So let’s quickly look at Nvidia’s headwinds, which the bulls often seem to forget about. We’ll start with geopolitics. US export restrictions have cut Nvidia’s China market share in half. Nvidia founder and CEO Jensen Wong says the company has already walked away from $15 billion in China sales and written off a staggering $5.5 billion in inventory tied to its banned H20 AI chips. Plus, the competitive landscape is shifting. Cloud giants like Amazon, Microsoft, and Google, Nvidia’s top customers, are racing to build their own AI chips and Chinese firms like Huawei are also quickly closing the gap. There are also upstarts like Grock that have raised large slugs of money to take on Nvidia in all things AI chips. Meanwhile, investors are more closely scrutinizing Nvidia’s profit margins. Despite continued robust demand for Nvidia’s Blackwell AI chips, company’s gross profit margins are compressing, pressured by rising data center costs and complex new hardware. Some investors are hedging, including Michael Burry of the Big Short Fame. He recently bought put options on Nvidia, betting that chipmaker’s rally is running out of bandwidth. AI might be the future, but Nvidia’s valuation may already be there. This week, we’ll find out if their results were worth the usual hype.