"Like its fellow Magnificent 7 members, Nvidia struggled due to economic uncertainties about the effects of tariffs, as well as due to Chinese AI innovations. Bears saw Nvidia stock falling further because of bearish pressure from the broader market. Yet, some investors remain optimistic for a sustained rebound, and lately that seems to have been the case. The stock returned to all-time highs as some tariff fears dissipated and macro data improved, and Nvidia became the first $5 trillion market cap company."
"The bearish argument that prevailed on Wall Street early this year is not entirely gone, though. While the AI rally may continue, it remains speculative, whereas the reasons for Nvidia stock's decline in the spring were genuine. Given challenges such as being effectively locked out of China, Nvidia may still be at a crossroads right now. We do not know for sure where the stock will go next, but with the data on hand, we can speculate."
"Nvidia controls an estimated 80% of the AI accelerator market through its H100/H200 GPUs and CUDA software ecosystem. It is tough for Nvidia customers to switch to another supplier. This has allowed the company to dominate the industry, with customers returning year after year. As such, it is well-positioned to capture growth from the $400 billion AI chip market projected for 2030."
The trade war with China caused Nvidia shares to fall to below $87 in April, driven by tariff uncertainties and Chinese AI competition. Improved macro data and easing tariff fears coincided with a rebound to all-time highs and a $5 trillion market capitalization. Persistent bearish concerns remain because the AI rally is speculative and trade-related headwinds, including effective exclusion from China, pose genuine risks. Three key performance drivers through 2030 include AI infrastructure dominance (around 80% market share via H100/H200 GPUs and CUDA), rapid data center revenue expansion (from $4.3 billion to $35.6 billion), and concerns about margin preservation.
Read at 24/7 Wall St.
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