Nvidia's AI Supremacy Tested as Rivals Rise and Insiders Cash Out

Nvidia (NVDA) shares have faced a post-earnings selloff in late 2025, but a wave of analyst upgrades and bullish price targets suggests the stock remains a top pick for investors. Sanford C. Bernstein, a key player in the narrative, raised its price objective to $275-a 50% gain from the current price-while maintaining an "outperform" rating. This move follows a broader surge of optimism from the sell side, with 46 "Buy" ratings and four "Strong Buy" calls, culminating in a consensus price target of $257.79. The stock's recent pullback, however, has sparked debates over whether it reflects a correction in a speculative AI-driven rally or a buying opportunity amid strong fundamentals.

The recent analyst activity underscores confidence in Nvidia's dominance in the AI hardware market. Bernstein's Stacy Rasgon highlighted the company's robust earnings performance, with Q3 revenue surging 62% year-over-year to $57 billion, driven by insatiable demand for its Blackwell chips. Evercore ISI Group, meanwhile, set a street-high price target of $352, projecting 95% upside, citing a 50% quarter-on-quarter rise in Blackwell revenue and a $13 billion quarterly contribution from the platform. The firm also noted Nvidia's inventory buildup, with supply commitments up 63%, signaling anticipation of larger orders as AI deployment accelerates.

Despite these positives, competition is heating up. Alphabet's Tensor Processing Units (TPUs) are emerging as a credible alternative, with reports indicating Meta is in talks to adopt TPUs for data centers starting in 2027. This development has fueled Alphabet's 18% gain in the past month, outpacing Nvidia's 32% year-to-date rally. Bernstein analysts, however, argue that while TPUs pose a challenge, the AI market's scale-still characterized by "compute scarcity"-leaves room for both GPU and ASIC approaches to thrive.

Institutional ownership remains a key tailwind for Nvidia, with 65.27% of shares held by institutional investors. The stock's technical indicators also suggest a potential rebound, trading near its 52-week low of $86.62 but above its 200-day moving average of $169.23. However, insider sentiment has turned cautious, with corporate insiders selling over 126,000 shares in the past quarter.

Looking ahead, the stock's valuation appears attractive relative to its long-term averages. At 25 times forward earnings, it trades below its 10-year average of 35 times, while its 2026 PEG ratio of 0.55 suggests undervaluation compared to the AI sector's average of 1.4. Evercore analysts argue that the current pullback offers a "buying window" for patient investors, especially as demand for AI infrastructure continues to outpace supply.