Citron Thinks Nvidia Shares Could Fall 15%, Calls It 'Great Company, Dangerous Stock'

Bearish calls on NVIDIA Corporation NVDA haven’t worked out so well on Wall Street in the past couple of years. However, Citron Research's Andrew Left has never shied away from going against the grain.

On Friday, Left tweeted that Nvidia’s 21.3 percent year-to-date gain doesn’t make sense, and the stock is ripe for a pull-back.

Left mentioned four reasons why Nvidia is headed back to $200 per share:

• Since the beginning of the year, Nvidia stock is up 20 percent while the price of bitcoin has dropped 40 percent.
• A new wave of artificial intelligence startups may challenge Nvidia’s dominant position in the space in 2018.
• Datacenter competition is on the rise and should not be dismissed.
• Nvidia is no longer the clear leader in autonomous vehicle technology, as recent reports have Alphabet Inc. GOOG GOOGL’s Waymo in the lead.

Left warned Nvidia investors that multiple expansion is a dangerous game and pointed out that Nvidia’s share price is up 111 percent in the past 12 months, whereas 2018 revenue estimates are up just 11 percent in that time.

“Playing multiple expansion is like playing chicken, it doesn’t end well for shareholders,” Left wrote.

Left challenged Nvidia investors to take some perspective on the stock’s recent move.

“If you own the stock, you must ask yourself the question, ‘Is $NVDA really worth $36 billion more than it was New Years Eve with $15k BTC?’”

Left said Nvidia is a great company with a dangerous stock.

Nvidia traded down 2 percent on a weak day for stocks. It hit a low of $231.17 following Left's tweet, but was trading around $235.45 at time of publciation.

Related Links:

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Goldman Sachs Removes Nvidia From Conviction List, But Maintains Bullish Stance

Image Credit: yoggy0 from Yokohama, Japan (SIGGRAPH Asia 2009) [CC BY 2.0], via Wikimedia Commons