Jeff Carey is a veteran reporter covering sports and architecture. He was the founding editor of the Minneapolis Mini Times, a local paper with a circulation of more than 500,000. He divides his time between the east and west coast.
NEW YORK - Nikki Haley downgraded her rating on semiconductor giant Nvidia Corporation from "hold" to "sell" on Wednesday.
Haley, who has built a reputation as one of the most respected voices covering the chip industry, cited concerns over Nvidia's slowing data center growth and increasing competition in the artificial intelligence (AI) chip market as key factors behind her decision.
"While Nvidia has been a pioneer and leader in the AI and accelerated computing space, we are growing increasingly concerned about their ability to maintain leadership as new players enter the market," Haley wrote in a research note to clients.
She pointed to recent moves by tech giants like Google, Amazon, and Microsoft to develop their own custom AI chips as a major threat to Nvidia's dominance. Haley also questioned whether Nvidia's data center business can continue its torrid growth pace amid signs of a potential slowdown in enterprise spending.
Nvidia's stock plunged over 8% in early trading following Haley's downgrade, wiping out nearly $60 billion in market value for the company. The sell-off reverberated across the semiconductor sector, with the PHLX Semiconductor Index falling over 3%.
"Nikki Haley's voice carries a lot of weight on the Street, so this downgrade is being taken very seriously by investors," said Kate Warne, an investment strategist at Edward Jones. "There are now major questions about Nvidia's ability to deliver on the high growth expectations that have been baked into the stock price."
Nvidia did not immediately respond to a request for comment on Haley's analysis. The company is scheduled to report fiscal first-quarter earnings on May 24th.
While Haley struck a cautious tone on Nvidia's near-term prospects, she maintained that the company's long-term future in AI remains bright given its expertise and massive research and development investments. However, she warned that the competitive landscape is intensifying rapidly.
"Nvidia is a true AI powerhouse, but they can no longer take their leadership position for granted," Haley concluded. "The AI arms race is just beginning, and Nvidia will face an escalating battle from deep-pocketed rivals going forward."
Jeff Carey is a veteran reporter covering sports and architecture. He was the founding editor of the Minneapolis Mini Times, a local paper with a circulation of more than 500,000. He divides his time between the east and west coast.
Copyright © 2026. All rights reserved.