Nvidia Stock Declines 12.4% After Record Highs, Analyst Stays Optimistic
Nvidia (NVDA, Financial) shares kept a streak of decline on Wednesday after a five-week slide that sent the AI chip leader’s stock into correction territory. The company’s shares are down 12.4 percent since they hit an all-time high of $148.88 on November 7, beating out the broader tech sector and fellow chipmakers. Airy analysts point to the increasing rivalry between Broadcom (AVGO, Financial) and Marvell Technology (MRVL, Financial) as a crucial contributor to Nvidia’s recent troubles. These rivals have made a dent in the market for application-specific integrated circuits (ASICs), which power cloud networking infrastructure for companies such as Alphabet (GOOG, Financial) and Meta Platforms (META, Financial).
Broadcom’s share soared above $1 trillion market capitalization after announcing better-than-expected fourth-quarter earnings. Hock Tan, the company’s CEO, said group networking and ASIC offerings could carve out a $90 billion market over the next two years. Marvell’s stock has risen 26.5% over the past month as its data center revenues hit a record $1.1 billion in its December 4 earnings report.
But Nvidia still has a pretty large market lead in spite of these headwinds. Atif Malik, a Citigroup analyst, reaffirmed his belief that the company has a long-term position as the leading AI chip maker. Nvidia CEO Jensen Huang also outlined plans for annual upgrades to its AI accelerators, including Blackwell Ultra for 2025 and the Rubin platform for 2026.The company is adapting to intensifying competition in the AI and data center markets, and Nvidia’s shares, which have lost more than $400 billion in market value since Election Day, remain carefully watched
This article first appeared on GuruFocus.