Nvidia's stock is facing downward pressure as it continues a recent selloff, influenced by several factors affecting the AI-centric chipmaker. The stock has entered correction territory, having dropped 11% from its peak in early November. Analysts point to difficulties in scaling up sales of Nvidia's new Blackwell AI chips and geopolitical tensions, particularly between the U.S. and China, as key contributors to the decline. The U.S. is set to introduce regulations that would limit the sale of advanced AI chips in Southeast Asia and the Middle East, aiming to curb China's access to computing power. Additionally, Nvidia is experiencing a slowdown in growth, with revenue projected to rise by 55% in 2025, a significant deceleration from the over 200% y/y growth seen in previous quarters.
The Direxion Daily NVDA Bull 2X Shares (NVDU) ETF has mirrored this downturn, falling 4.85% to $87.54 as of 11:00 AM on Tuesday, December 17.