On Friday, July 5th, Wall Street lowered its stock rating for Nvidia.

NewStreet Research analyst Pierre Ferragu downgraded the stock rating of this AI giant from "buy" to "neutral" in a report on Friday, believing that the stock seemed to be fully valued.

Ferragu didn't completely put down the stock. The analyst gave one-year and two-year target prices of $135 and $143, respectively, which means that it could rise 6% to 12% above current levels.

He's just not as optimistic as he was recently or as most people on Wall Street.

"Based on what we've heard in the value chain, we believe that there is limited room for further upward movement. We downgraded the stock to neutral today because only a bull market will bring about an upward trend, meaning that the prospects for after 2025 will improve significantly, and we are not sure whether this will happen." Ferragu said.

Ferragu said that although Nvidia still has one of the strongest AI franchises among its competitors, it's necessary to "take a more cautious view" of the stock after it rose 157% this year.

"Nevertheless, the team's quality is still intact and we will buy the team again, but the premise is that the team's stock price will continue to decline," he said.

According to Bloomberg's data, Wall Street analysts rarely express pessimism about Nvidia, with 89% of the 72 analysts rating the stock as "buy."

Ferragu's target price of $135 is consistent with the stock's 12-month average target price of $134.77.

There are still institutions with optimistic expectations for Nvidia.

Some people expect Nvidia's rapid growth to continue. An analyst predicts that the stock's valuation will almost double to $6 trillion by the end of this year.

Eric Jackson, hedge fund manager of EMJ Capital, said that Nvidia's stock price is expected to continue to rise significantly before the end of the year.

Jackson expects Nvidia's stock price to reach $250 by the end of this year, up 101% from current levels.

If this rise becomes a reality, the valuation of the AI chip company will reach an astonishing $6 trillion.

Jackson said that Nvidia's stock is still relatively cheap from a valuation perspective.

"Over the past five years, Nvidia's average expected P/E ratio was around 40 times. Yesterday, after two days of adjustments, the expected P/E ratio dropped to 39 times. But in the past five years, there were three times when the expected P/E ratio exceeded 50 times, and twice it reached around 70 times before falling back. So we haven't seen that kind of excitement yet," Jackson said in his CNBC interview on Tuesday.

Jackson believes that as investors begin to focus on Nvidia's profit potential in 2025 and 2026, this excitement may drive Nvidia's stock price far above its average expected PE ratio and closer to its peak.

"This is a potential stock. A bad earnings report may reset expectations, but good news can also be overhyped. Although the stock has risen sharply, from a PE perspective, the excitement has not caught up yet," Jackson said.

So far this year, Nvidia's stock has surged 151%, and last week the chipmaker briefly became the world's most valuable company with a market value of about $3.3 trillion.

"What will happen in the second half of this year? As people start to pay attention to the sales of Blackwell chips, their gross margins, and start thinking about the prospects of the upcoming Rubin chip, we will begin to see this excitement reflected in a high PE ratio. If this happens, the company's market value will reach $6 trillion," Jackson said.

Jackson added that Nvidia has a significant competitive advantage among its competitors and will leverage this advantage in the coming years. In addition, Jackson said that comparing Nvidia today to Cisco during the dot-com bubble is unfounded.

"Today's Cisco is not the Cisco of the Internet era. At that time, Cisco's expected P/E ratio reached a peak of about 136 times. Similarly, we're below the average level of the past five years. So, although the stock has performed so well, it's still relatively cheap compared to past trading prices," Jackson said.

Even considering the stock's substantial rise over the past year, Jackson is not the only one on Wall Street who is still bullish on the stock.

Constellation Research and Rosenblatt have target prices of $200 for Nvidia's stock, while Bank of America recently reiterated its target price of $150.