As the "most important stock on Earth" in the eyes of Wall Street, Nvidia's market value has evaporated by about $406 billion this week, which has put considerable pressure on the US stock market. Various signs indicate that people's concerns about the health of the US economy and the possibility of excessive concerns about artificial intelligence trading are rapidly spreading.
In the past two weeks, the market value of this globally leading artificial intelligence chip manufacturer has shrunk by about one-fifth. For this tech giant that has almost single handedly led the rise of the US stock market in the past two years, the latest plunge also highlights a more urgent issue facing investors - now, Nvidia's volatility is making other "Big Seven" peers pale in comparison, and even compared to Bitcoin, it looks like a calm harbor.
Market data shows that over the past 30 trading days, Nvidia's stock price has fluctuated significantly between $90.69 and $131.26, with Tuesday's market value drop (evaporating $279 billion) reaching an unprecedented level for a single US stock.
This level of volatility has caused its actual volatility index over the past 30 days to rise to around 80- about four times that of Microsoft, twice that of Bitcoin, and higher than Trump's media company and a series of meme stocks.
According to industry compiled data, this decline has pushed the stock to its worst two-week performance in two years. Before the stock price fell, the company had just released a lukewarm performance forecast last month, and its Blackwell chips also encountered delayed shipments, which dampened investors' excitement. Subsequently, there were reports that the US Department of Justice had issued a subpoena against the company in an escalating antitrust investigation. Broadcom's disappointing sales forecast this Thursday has further dimmed the outlook for the entire chip industry.
Rhys Williams, Chief Strategist of Wayve Capital Management LLC, said, "The market environment you are currently in is very difficult. As for where the bottom of (Nvidia) is, no one can say for sure
Of course, even though there has been a recent decline, Nvidia has still brought substantial returns to investors so far this year. The stock has still risen by over 100% this year, with a market value increase of approximately $1.3 trillion. Wall Street generally expects Nvidia to continue its strong momentum as companies build infrastructure related to artificial intelligence, and this process is expected to continue for at least a few more quarters.
According to data compiled by institutions, Nvidia's largest clients, particularly Microsoft, Meta, and Amazon, collectively account for over 40% of Nvidia's revenue. And these tech giants have confirmed their spending plans in recent quarters.
Nvidia's performance last week actually confirmed this optimistic view. This "AI barometer" recorded revenue of $30.04 billion in the second quarter, a year-on-year increase of 122%; Adjusted earnings per share of $0.67 exceeded market expectations, but did not meet the most bullish expectations.
Williams from Wayve Capital pointed out, "For long-term investors, now may be a good time to buy. If I have new funds now, I would be enthusiastic about buying some stocks related to artificial intelligence
What do you think of the future market?
At present, some industry insiders also have their own opinions on the future trend of Nvidia. Melius Research analyst Ben Reitzes stated that while antitrust pressure is a factor that current Nvidia investors must pay attention to, other factors may have a greater impact on the company's stock price trend in the coming months.
Reitzes is currently focusing on two main points: first, Nvidia's profit margin performance, and second, whether the company can maintain its growth potential until the 2026 fiscal year. It believes that these two points may become the key to determining the trend of Nvidia's stock price in the next six months.
In Reitzes' view, investors have been concerned about the potential impact of delayed release of the new Blackwell chip series on revenue before the financial report is released, to the extent that they "seem to have forgotten to consider the impact of addressing this issue on profit margins". He wrote, "The key for this stock now is how and when the gross profit margin will bottom out and rebound
Reitzes predicts that as inventory reserves stabilize, Blackwell's earnings/production will begin to rise, and the gross profit margin for the first quarter of fiscal year 2026 will bottom out, reaching approximately 72.6%. But before that, investors need to have confidence in the profit margin path. He wrote, "Once investors feel that Blackwell will once again push up overall profit margins, the stock is likely to rise in the first half of the 2025 calendar year
In addition, another recent issue affecting Nvidia's stock price is the renewed debate surrounding AI and its investment return rate. Reitzes pointed out that this is quite similar to what happened during this period last year - investors began to question whether 2025 would be the year when AI investment peaked, as they did not see AI applications widely popularized enough.
However, Reitzes believes that investors will receive more information in the near future to verify all of this. For example, he is optimistic about various video generation applications, which may become "the key factor to promote investment, and provide more practical cases throughout 2026 to further rationalize the investment in consumer Internet applications". OpenAI's next generation GPT may also spark a craze in enterprises.
Nvidia's next generation chips after Blackwell may also spark interest in the near future. Reitzes pointed out, "When we hear more about Rubin at the GTC conference in March next year, this debate is expected to truly ease