Nvidia stock extends decline today: should you ‘buy the dip’ in the AI darling?
News Summary
Nvidia shares continued to decline on Friday, extending a selloff that began after the company’s latest earnings release. Despite strong results, broader market concerns overshadowed optimism around AI demand and Nvidia’s growth cycle durability, causing initial gains to reverse sharply. Nvidia stock was down 2% at $175.64, following a 3.2% decline after its earnings report. While concerns about an AI bubble persist, analysts broadly maintained a constructive view of Nvidia’s fundamentals. Analysts from Truist Securities, UBS, Morgan Stanley, and Goldman Sachs all raised price targets and reiterated Buy ratings, citing accelerating revenue trajectory, long operational life of chips, and vast unserved demand. They highlighted that A100 chips shipped six years ago remain at full utilization, indicating an absence of classic bubble conditions. Beyond equity markets, Nvidia’s ecosystem continues to expand through global partnerships. Foxconn announced on Friday that a $1.4 billion supercomputing center, developed with Nvidia, will be completed in the first half of 2026. This facility is set to become Asia’s first large-scale AI data facility powered by Nvidia’s Blackwell GB300 chips, further cementing Nvidia's leadership in AI infrastructure.
Background
Nvidia is a global leader in graphics processing units (GPUs), dominating the artificial intelligence (AI) computing market. Its chips are widely used in data centers, professional visualization, gaming, and autonomous driving. In recent years, Nvidia's stock has seen significant growth due to the rapid advancement of AI technology, positioning it as a primary beneficiary of the AI boom. Despite market concerns about an 'AI bubble,' Nvidia has consistently emphasized the real economic utility and robust demand for its products. For instance, its A100 chips, first shipped six years ago, remain at full utilization, which analysts cite as a clear indication against a bubble. The current stock decline occurred after strong earnings, but was overshadowed by broader market sentiment. Foxconn, primarily known as Apple's top iPhone assembler, has been expanding its business into electric vehicles and AI data centers in recent years. It has become Nvidia's main manufacturer of AI racks—server systems designed for intensive AI workloads—further deepening their collaboration in the AI ecosystem.
In-Depth AI Insights
Despite widespread market concerns and a stock decline, what is the underlying logic behind analysts' continued bullishness on Nvidia? - Analysts differentiate between company fundamentals and broader market sentiment. While macroeconomic headwinds and rising interest rates might trigger short-term sell-offs, they see Nvidia's execution, technological leadership, and massive unmet demand in AI as the true drivers of its value. Morgan Stanley, for instance, highlighted a $10 billion sequential quarterly revenue growth, surpassing guidance by $3 billion, indicating demand is not waning. - The key lies in the