A financial analyst downgraded NVIDIA stock citing concerns about slowing data center GPU demand growth.

Nvidia has received a rare downgrade from Elazar Advisors, a small equity research shop, as concerns mount over slowing momentum in the company's data center business. Analyst Chaim Siegel downgraded the chipmaker to neutral from buy, warning that recent hiccups could signal the beginning of broader weakness in the artificial intelligence boom. While Siegel maintains long-term confidence in the AI narrative, he flagged deteriorating near-term fundamentals that warrant a more cautious stance from investors.

The primary concern centers on decelerating sequential growth in Nvidia's data center business. "Now we've seen four quarters of decel in the sequential datacenter growth. Off of huge numbers that's fine. But last quarter sequential growth slowed again and now I'm concerned that it can continue to slow in Q3 and Q4," Siegel wrote in his note to clients. He further noted that as customers await the Blackwell processor, which may not reach full-quarter ramp until Q1, continued slowdown appears likely across the overall data center business through the remainder of the year.

The downgrade stands in sharp contrast to the broader analyst consensus on Nvidia. Of the 64 analysts tracked by LSEG, 58 have buy or strong buy ratings on the chipmaker, with only six maintaining hold ratings. Nvidia's stunning ascent—the stock has climbed 700% since the start of 2023—has made bullishness the profitable stance for Wall Street, though momentum has recently stalled. Over the past three months, the stock has declined 4.6%, reflecting a shift in market sentiment after its extraordinary rally tied to excitement around artificial intelligence and the critical role of Nvidia's advanced semiconductors in powering the computing requirements of recent technological breakthroughs.