Nvidia Stock Drops. Why Shares Are Still Down Following Last Week's Earnings Report

Dow Jones07:29

NVIDIA Corp stock dropped Monday amid reports that a company executive had met with Chinese officials.

Shares in the semiconductor manufacturer, which have tripled in value over the past year, declined 4.2% to $136.02. The stock has retreated since last week's earnings, even though the results exceeded Wall Street's expectations.

The challenge for Nvidia now is living up to the market's incredibly high expectations for future earnings. Wall Street expects 54% revenue growth in 2025. Though the strength of demand for Nvidia's high-powered artificial intelligence chips continues to grow, investors risk asking for more than the company can deliver if they ramp up their demands even faster.

In a sign that China remains an important market for the chip maker despite President-elect Donald Trump's plans to escalate trade tensions, Nvidia's head of worldwide field operations Jay Puri met with China's vice commerce minister in Beijing on Monday, Reuters reported.

Tim Cook, CEO of tech peer Apple, is also visiting the world's second-biggest economy, showing up at a conference on supply chains, the South China Morning Post reported.

Apple, the maker of iPhones, and Nvidia are vying for the title of world's most valuable company -- both currently have market capitalizations of about $3.5 trillion.

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Comments

  • syzuhair
    08:12
    syzuhair
    Its crashing. Liquidate
  • Guavaxf30
    07:44
    Guavaxf30
    I repeat: My view is the basic thesis has not changed. Nvidia is seeing a valuation anxiety moment but the truth remains that it is the best AI play out there. Everybody who is anybody are lining up to buy their chips. Let the shortimers play out. When the calm and sense returns, Nvidia will be back with a vengeance.
  • Sujon
    07:40
    Sujon
    it's fearless.... 
  • AngieAbcde
    07:30
    AngieAbcde
    Share your opinion about this news…
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