Monday morning, Nvidia was going down. The chip maker is having a hard time breaking out of its trading range while the market figures out what’s stopping sales of its AI processors.
In the morning, Nvidia NVDA -2.32% stock was down 1.8% to $131.90. On Friday, the price dropped 2.3%.
Over the past month, Nvidia’s stock price has mostly stayed the same. This is because the market is still waiting for proof of how quickly the company can boost sales of its Blackwell AI chips. The company is likely to stay at the top of the AI chip market for a while, but it has to deal with some problems caused by politics around the world.
The Wall Street Journal reported on Friday that people familiar with the matter said the U.S. is working on rules that would limit the sale of advanced AI chips in places like Southeast Asia and the Middle East. This is to stop China from using computers stored in other countries.
The huge amount of growth the company has seen in the last two years has also set a high bar for itself. FactSet polled analysts and found that most of them thought Nvidia’s income would rise by 55% to $191.45 billion in 2025. This is compared to the expectation that it would have more than doubled to $123.37 billion in 2024.
The expected drop in sales doesn’t tell the whole story. The average amount of money Nvidia makes per share is projected to go up even more, from $2.72 in 2024 to $4.20 in 2025.
Finally, buyers who don’t want to wait may be harming the company by looking for other stocks that will give them quick profits. As for other chipmakers, Broadcom AVGO +8.95% was up 8.4% in morning trade. This was the continuation of its rise after an earnings report on Friday that sent the stock soaring 24% on the promise of its custom AI chips.
“Uncertainty about Nvidia Blackwell deliveries, a lack of recovery in the auto and industrial sectors, and fear of restrictions from China have all made semi stocks fall.” “In the meantime, investors’ attention has turned to software stocks that are “resistant” to China and that benefit from AI,” Vivek Arya wrote in a research note for BofA Securities on Monday.
On the other hand, Arya kept Nvidia as a “Top Pick” in the semiconductor industry for 2025, saying that Blackwell deployments by U.S. customers would boost AI chip stocks.
