Why Nvidia (NVDA) Stock Is Down Today
Shares of leading designer of graphics chips Nvidia (NASDAQ:NVDA) fell 6.9% in the afternoon session after the company reported Q4 2024 earnings: Additionally, concerns about the company’s performance in China may be weighing on sentiment. Management highlighted declining sales in the region, and new trade tariffs imposed by the Trump administration could further exacerbate this downturn, making it more difficult to reverse the trend.
The quarter itself was fine as Nvidia beat analysts’ revenue, EPS, and adjusted operating income expectations. Next quarter’s revenue guidance also topped Wall Street’s estimates.
On the other hand, its inventory levels increased materially. Still, this quarter had some key positives.
The shares closed the day at $120.02, down 8.8% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Nvidia? Access our full analysis report here, it’s free.
Nvidia’s shares are very volatile and have had 27 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 29 days ago when the stock dropped 6.9% after Bloomberg News reported that the Trump administration is considering curbing sales of the company’s chips to China following the emergence of the DeepSeek AI model. According to the sources, the restriction might apply to some of Nvidia’s cutting-edge chips, including the H20 AI chips.
Nvidia is down 12.5% since the beginning of the year, and at $121.03 per share, it is trading 19% below its 52-week high of $149.43 from January 2025. Investors who bought $1,000 worth of Nvidia’s shares 5 years ago would now be looking at an investment worth $19,170.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.