NVIDIA (NVDA) is showing rare weakness after short seller Citron Research called for the high-flying stock to retreat in 2017.

CITRON SAYS NVIDIA FALLS TO $90: Shortly after Wednesday's market open, Citron Research tweeted out a cautionary note on NVIDIA. Saying the stock "belongs at $90," Citron identified six alleged risks that investors are disregarding, including: 1) NVIDIA's reliance on videogaming and AMD's (AMD) missteps for growth rather than the pursuit of new markets; 2) "significant" competition from existing and emerging players in data center, as well as new 2017 product launches from AMD; 3) the market's potentially misguided confidence in the value of NVIDIA's intellectual property, given that Intel (INTC) "already has access to this IP" from its licensing pact with the company; 4) the conclusion of the Intel licensing deal this year "will have a significant effect" on NVIDIA's 2017 EBITDA; 5) increased competition from Intel in mid-2017 should have a "significant impact" on NVIDIA margins due to the former's vertical integration as compared to NVIDIA's reliance on Taiwan Semiconductor (TSM) to manufacture its chip designs; 6) competition from custom silicon and graphics chip workarounds by existing customers such as Alphabet (GOOG) and Apple (AAPL). Citron founder Andrew Left is slated to appear on CNBC after the market close, likely offering additional commentary on the purported headwinds.

INTEL SEES 2017 AI TURNAROUND: Citron's short thesis comes alongside an interview today from Intel executive Raejeanne Skillern, with the data center and cloud manager telling Nikkei that Intel is looking to gain the upper hand in artificial intelligence with new chips in 2017. Skillern added that "NVIDIA has gotten a very tiny piece of the market right now... But Intel's investment and the products you are going to see in 2017, I think, will change the tide."

PRICE ACTION: Shares of NVIDIA are down 5.2% to $111.18, dropping precipitously after Citron's call. The chipmaker has been one of 2016's strongest stocks with a year-to-date gain of nearly 240%.