Nvidia ( (NVDA) ) has fallen by -9.05%. Read on to learn why.
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Nvidia’s stock price has experienced a significant decline of 9.05% over the past week, despite the company’s CEO, Jensen Huang, announcing strong demand for their new Blackwell chips. These advanced AI chips are central to Nvidia’s growth strategy, as they are crucial for data centers and AI applications. The decline in stock price comes amidst broader market concerns and a bearish bet by Michael Burry, a renowned investor known for predicting the 2008 financial crisis. Burry’s recent move to position against Nvidia through put options has caught the attention of market watchers, adding to the stock’s volatility.
The stock’s downturn is also influenced by geopolitical factors, as Nvidia has confirmed there are no active discussions to sell Blackwell chips to China due to export restrictions. These restrictions are a result of concerns that the chips could enhance China’s military and AI capabilities. Despite these challenges, analysts remain optimistic about Nvidia’s long-term prospects, with a consensus rating of ‘Strong Buy’ and a projected price target suggesting a potential upside.
Additionally, the AI sector is facing potential short-term volatility due to energy supply constraints, as the demand for AI data centers strains existing infrastructure. This has led to concerns about an AI bubble, which could further impact Nvidia’s stock performance. However, investors are advised to remain cautious but optimistic, as the long-term promise of AI continues to drive interest in Nvidia and similar companies.