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Nvidia delivered a blowout quarter but Wall street is not impressed; Here are some concernsDespite the concerns, Nvidia is covered by 66 analysts, of which 61 have a "buy" rating and a consensus estimate of price targets implies an upside potential of 37% from current levels.By Hormaz Fatakia   February 27, 2026, 6:38:21 AM IST (Published)4 Min ReadNvidia Corp., the leader in AI chip supply and the most valued company in the world, reported yet another quarter that surpassed expectations, not just on the revenue and the Earnings Per Share (EPS) front, but also on the guidance for the upcoming quarter.

A blowout quarter though is not enough for Wall Street anymore. It needs clarity on multiple issues concerning the company.

The OpenAI Conundrum 

Wall Street had made a big deal of Nvidia's announcement of investing $100 billion in ChatGPT maker OpenAI. Today, it sees it at a major overhang on the Jensen Huang-led enterprise.

This, despite multiple clarifications by both Huang and Nvidia that the deal is not cast in stone. In its earnings statement, Nvidia once again clarified that the company is "finalizing an investment and partnership agreement" with OpenAI, but there is no assurance that the transaction will be completed or that the company will enter into any such agreement.

Competition

A major reason behind Nvidia's stratospheric surge over the last three years has been its "first mover advantage", but that appears to be fading slowly, but surely.

Hyperscalers, or big tech firms like Amazon, Alphabet, Meta and Microsoft, have cumulatively announced capex plans worth nearly $700 billion for the year ahead but Nvidia is no longer the only one vying for a piece of the pie. These companies now comprise of 50% of Nvidia's Data Center revenue, which in turn contributes to over 90% of the overall company topline.

And these companies are looking at avenues beyond Nvidia as well. Meta this week announced a partnership and an investment in Nvidia's closest rival AMD, just a week after announcing a similar partnership with the former. Rising competition and fears of a slowdown in capex by these hyperscalers also keeps the street worried.

Lack Of Clarity On China

China was a major market for Nvidia, but the curbs put in place, first by the Biden and then by the Trump Administration has put a brake on the sales in the world's second-largest economy.

Nvidia has not accounted for any sale from China in its forecast issued for the ongoing quarter. The Trump Administration has granted Nvidia a small license to ship H200 processors to China, but Nvidia is still uncertain whether a similar approval will come from Beijing.

The same processors, when the enter the US, are subject to a 25% tariff.

Hardika Singh of Fundstrat Global Advisors believes that Nvidia surpassing estimates on earnings and guidance is nothing novel as it rarely misses them, but concerns about its narrowing moat and how will it tackle the AI disruption is something that the company did not shed enough light on. There are also concerns about whether it can maintain its 75% gross margins going forward, according to Matt Maley of Miller Tabak.

'Big Short' Makes A Big Disclosure

Michael "the big short" Burry, who made a name for himself by shorting the housing market right before the global financial crisis two decades earlier, wrote in a blog post about Nvidia and its financials.

Burry, who has earlier disclosed personal short positions in Nvidia, highlighted that Nvidia's Form 10-K shows purchase obligations to be $95.2 billion, which is a jump of nearly 6x compared to the previous year's figure of $16.1 billion.

"This is because TSMC demanded longer term contracts and cash as it had to build out custom semiconductor fabrication and packaging capacity for NVDA’s new technology. That has not been the normal course of business until recently," Burry wrote.

Nvidia has also said these obligations will only grow and become a greater position of supply. Its inventory also went up by 8% on a sequential basis.

Analysts Remain Bullish

Nvidia is covered by 66 analysts, of which 61 have a "buy" rating and a consensus estimate of price targets implies an upside potential of 37% from current levels.

Shares of Nvidia ended 5.5% lower on Thursday, marking its biggest single-day drop since April last year.Continue ReadingTagsNvidiaNVIDIA earningsNvidia share pricenvidia shares