Wall Street Might Be Sleeping on Nvidia, But Not for Long

Nvidia’s stock has taken a notable dip in 2025, falling roughly 14% year-to-date. That slide has little to do with the company’s financials and everything to do with factors outside its control.

Fresh U.S. export restrictions on advanced chips, escalating trade war tensions, and worries that the boom in AI spending might cool off have all weighed on investor sentiment. In short, a mix of big picture headwinds has overshadowed Nvidia’s stellar results in recent quarters.

However, if you look past the noise, there are plenty of signs that Nvidia’s growth story remains intact and potentially ready to kick back into high gear. In fact, a series of positive developments suggests Nvidia could defy Wall Street’s tempered expectations when it reports earnings later this month.

Key Points

• Despite a ~14% YTD decline due to export restrictions, trade tensions, and macro fears, Nvidia’s core business remains strong and its fundamentals are intact.

• Suppliers like TSMC and Lam Research are ramping production, while cloud giants like Google and Oracle are deploying Nvidia’s new Blackwell chips at massive scale, signaling ongoing and growing demand.

• With management projecting $43 billion in revenue for the quarter, Nvidia is positioned to beat expectations, potentially triggering a rebound in its stock price and presenting a timely buy-the-dip opportunity.

Strong AI Chip Demand

Nvidia’s core business, selling powerful chips for artificial intelligence and data centers, is still firing on all cylinders. Consider that the data center segment made up nearly 90% of Nvidia’s revenue last year. If companies were really cutting back on AI infrastructure, Nvidia would feel it here first. Instead, recent reports from industry peers paint a very different picture: demand for AI chips is as strong as ever.

Take Taiwan Semiconductor Manufacturing (TSMC), the contract chipmaker that builds Nvidia’s GPUs. In its latest earnings call, TSMC revealed that sales of AI-related chips are on track to double this year. Management noted they haven’t seen customers pulling back orders despite the tariff drama swirling around.

If companies like TSMC and Lam Research are ramping up investment and seeing no slowdown in orders, it’s a strong indicator that Nvidia’s customers are still eagerly buying the hardware needed to power AI, export restrictions or not.

Big Catalysts on the Horizon

Meanwhile, Nvidia isn’t resting on its laurels. It has a powerful catalyst in its new “Blackwell” line of AI superchips, which is already making waves in the tech industry.

Major cloud service providers are racing to get their hands on Nvidia’s latest and greatest silicon. For example, Alphabet recently announced that Google Cloud is the first to offer Nvidia’s cutting-edge Blackwell GPUs to customers.

To support advanced AI workloads, Alphabet also reaffirmed an eye-popping $75 billion in capital expenditures for 2025, a 40%+ jump from last year, with a big chunk aimed at beefing up its AI infrastructure. It’s a safe bet that a good portion of that spending will flow toward high-end hardware like Nvidia’s chips.

Oracle is another big player all-in on Nvidia’s newest gear. The enterprise cloud provider has begun deploying Blackwell processors to power its Oracle Cloud Infrastructure, aiming to meet surging demand for next-generation AI applications (from complex “reasoning” models to generative AI services).

Oracle is building out new superclusters featuring over 100,000 Blackwell GPUs each – a testament to just how much compute power its clients are asking for. This kind of large-scale commitment from cloud giants signals that Nvidia’s latest chips are going to be ubiquitous in data centers rolling out over the coming year.

Setting the Stage for What’s Coming

All these trends are coalescing just as Nvidia heads into its next earnings report. The company only began shipping its Blackwell chips late last year, yet that initial rollout generated an impressive $11 billion in revenue right off the bat.

Now, with production ramping and major customers like Google and Oracle coming online, Nvidia’s management is understandably bullish about the current quarter. They have forecast around an annualized run rate that would be over $172 billion in revenue for FY 2026.

Hitting that target would represent a whopping 60%+ hike over the same quarter last year. That kind of growth is virtually unheard of at Nvidia’s scale, and it underscores just how intense the demand for its AI-focused chips has become.

Importantly, all the evidence we’ve discussed suggests Nvidia has a good chance to meet or even beat this aggressive forecast. If Jensen and his team deliver an upside surprise, say reporting even higher sales or issuing optimistic guidance for the rest of the year, it could be the catalyst that finally snaps the stock out of its funk.

Up to now, Nvidia’s share price hasn’t reflected the strength of its fundamentals – weighed down by those export and macro concerns but a blowout earnings report could change that narrative overnight. Wall Street loves when a company trounces expectations and then raises its outlook, and Nvidia seems poised to do exactly that.

A Buying Opportunity in an AI Leader

Considering the backdrop, Nvidia’s recent pullback might be giving savvy investors a chance to buy a fantastic company at a more reasonable price. At the moment, Nvidia shares trade around 38x earnings, which is a much lower multiple than they commanded at last year’s peaks.

Now, 38× earnings isn’t “cheap” in the traditional sense, but for the dominant player in an exploding AI market, one growing revenue at double-or triple-digit percentages, it starts to look quite attractive. Essentially, the stock’s valuation has come down while its prospects have only improved.

With huge tailwinds from AI adoption, new chips like Blackwell driving fresh business, and heavyweights like Alphabet and Oracle investing heavily in Nvidia’s technology, the company’s future looks as bright as ever. If the upcoming earnings report confirms these trends, the current dip in Nvidia’s stock price may prove to be a short-lived gift for investors.

In hindsight, today’s price could look like a steal if Nvidia’s results send the stock soaring. For those with a long-term perspective, Nvidia’s combination of a temporary markdown and powerful growth catalysts makes it a compelling buy-the-dip candidate pre-earnings. The stage is set for a potential post-earnings pop and you might not want to miss it.