Nvidia Stock Decline Raises Concerns, but CEO Optimistic

Nvidia stock has faced a significant 23% drop since January, largely due to fears over AI investments. However, CEO Jensen Huang reassures investors that demand for its GPUs will remain strong. This is a critical moment for Nvidia as it navigates investor sentiment and market trends.

Date: 20-03-2025

AI Rating: 7

The report discusses the recent decline of Nvidia's stock, which has fallen 23% from its peak earlier this year. This decrease is attributed to fears that U.S. companies may be overinvesting in AI infrastructure, particularly regarding Nvidia's GPUs. Such concerns, if valid and if investment in AI slows, could negatively impact Nvidia's future revenue.

CEO's Optimism: CEO Jensen Huang addressed these concerns at the GTC conference, asserting that demand for computation from AI technologies will far exceed previous expectations. He suggests that even with the emergence of companies like DeepSeek, which have reduced AI model training costs, demand for GPUs will not decline. In fact, he posits that the total computation needed is likely to be 100 times what was previously anticipated.

Market Position: Nvidia continues to be seen as a leading provider of GPUs for AI applications across various sectors. Huang also highlighted a significant increase in GPU shipments among the major cloud service providers, showing a 170% rise in shipments year-over-year. This indicates strong ongoing demand for Nvidia's products.

Earnings Outlook: Wall Street analysts indicate a positive outlook for Nvidia's stock price, with a median target price of $175 per share, suggesting a significant potential upside. Additionally, earnings are expected to grow by 51% in fiscal 2026, signaling robust financial performance.

Stocks: NVDA AMZN GOOGL MSFT ORCL TSLA