Nvidia Stock: AI Giant Faces Market Tumble

Nvidia, the AI chip leader, has experienced significant market turbulence in recent weeks, shedding approximately $783 billion in market value over a six-week period - representing about three-quarters of the entire semiconductor sector's losses. The stock has dropped roughly 21% since late January, while the broader PHLX Semiconductor Index recorded total losses of $1.04 trillion. The dramatic decline appears primarily triggered by the announcement of Chinese AI alternative DeepSeek, which raised investor concerns about Nvidia's market dominance. Additionally, Nvidia's recent quarterly results proved less impressive than previous reports, further dampening investor confidence. The upcoming Blackwell chip generation launch may also be creating margin pressure, with gross margins at 73% in the last quarter, partially attributed to this product transition.

Recovery Prospects

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Despite current market challenges, some analysts maintain optimism about Nvidia's future. Bank of America experts suggest investors should focus on profit margins, viewing their recovery as essential for significant stock appreciation. Meanwhile, competitors like Broadcom are showing greater resilience, with industry observers noting Broadcom might be positioned for stronger AI revenue expansion due to its smaller market size. The upcoming GTC conference, where Nvidia will unveil new products, represents a critical indicator for future development and could determine whether the company can regain investor confidence or if the DeepSeek revelation has triggered a lasting reassessment of the entire AI chip sector.