Nvidia's stock is experiencing a downturn as it extends a recent selloff, driven by a combination of factors impacting the AI-focused chipmaker. The stock has entered correction territory, having fallen 11% from its all-time high of $148.88 on November 7th. Analysts attribute this decline to challenges in ramping up sales of Nvidia's new Blackwell AI chips and geopolitical tensions, particularly between the U.S. and China. The U.S. is preparing to implement rules that would limit the sale of advanced AI chips in Southeast Asia and the Middle East, aiming to restrict China's access to computing power. Additionally, Nvidia is facing a slowdown in growth, with revenue expected to increase by 55% in 2025, a deceleration from the over 200% y/y growth seen in previous quarters.
Despite these headwinds, some analysts remain optimistic about Nvidia's long-term prospects. Bank of America Securities has reiterated Nvidia as a "Top Pick" in the semiconductor space for 2025, and Truist Securities' William Stein has set a price target of $204, citing the company's continued dominance in the AI sector. However, the stock's recent performance has diverged from the broader market, with other tech giants like Alphabet reaching new highs, indicating a shift in market leadership.
Nvidia (NVDA) shares are currently trading at $128.72, down 2.48% from the previous close of $132 on December 16th.