Nvidia (NVDA) bulls are riding hard for the stock, but there's still a valuable bear case for the world's most valuable chipmaker.

Arguably the most important "Magnificent Seven" member, Nvidia reports earnings after market close on Wednesday, and the usual hype is hard to miss.

The stock is up a sizzling 40% over the past year, but it's slightly down year to date due to concerns about artificial intelligence demand and China chip export controls.

Analysts, however, are staying overwhelmingly bullish on one of their favorite stocks. Roughly 87% have a Buy rating, according to Yahoo Finance data. The average price target is around $162, implying about 25% upside from current levels.

"We see a $5 trillion market cap on the horizon for the Godfather of AI, Jensen Huang, and Nvidia," Wedbush tech analyst Dan Ives told Yahoo Finance. Nvidia's current market cap stands at $3.21 trillion.

But the stock is trading at a price-earnings ratio of 31 times forward earnings, the share price has surged more than 600% in the last three years, and its market cap briefly claimed the world's most valuable company title last week. Some industry pros are beginning to ask: How much of Nvidia’s AI dominance is already priced in, and is there a downside surprise under the surface?

Read more: How does Nvidia make money?

It's a question worth pondering.

For one, US export restrictions have cut Nvidia’s China market share in half. Nvidia co-founder and CEO Jensen Huang said the company has already walked away from $15 billion in China sales and written off a staggering $5.5 billion in inventory tied to its banned H20 AI chips.

Plus, the competitive landscape is shifting. Cloud giants like Amazon (AMZN), Microsoft (MSFT), and Google (GOOG) — Nvidia’s top customers — are racing to build their own AI chips. Chinese firms like Huawei are also quickly closing the gap, according to Huang.

Furthermore, upstarts like Groq, which raised $640 million in a Series D round last year, are reeling in big investors to fund their efforts to snatch a slice of the AI chip pie.

Then there are the margins. Despite continued robust demand for Nvidia’s Blackwell AI chips, the company’s gross profit margins are compressing, pressured by rising data center costs and complex new hardware.

Of note, a big-time bear on the stock, Michael Burry of Scion Asset Management, has bought put options on the stock, according to a recent SEC filing. The hedge fund manager, who rose to fame after accurately predicting the subprime mortgage crisis in 2008, is betting the chipmaker’s rally is running out of bandwidth.