Nvidia’s stock has recently experienced a decline, trading around $126.14, influenced by several developments:

1. Microsoft’s Data Center Lease Cancellations: Reports indicate that Microsoft has canceled leases for significant data center capacity in the U.S., totaling “a couple of hundred megawatts.” This move suggests a potential oversupply in AI infrastructure, leading to concerns about reduced demand for Nvidia’s AI chips. 

2. Emerging Competition from DeepSeek: The rapid advancement of China’s AI startup, DeepSeek, which has developed generative chatbot technology more efficiently and cost-effectively than U.S. counterparts, has introduced new competition. This development raises questions about the future demand for Nvidia’s high-end AI chips. 

3. Microsoft’s In-House AI Chip Development: Microsoft’s unveiling of its own AI chip, the Azure Maia AI Accelerator, intended to power parts of its Azure cloud services, indicates a strategic shift to reduce reliance on Nvidia’s GPUs. This move could impact Nvidia’s future sales to major clients like Microsoft. 

These factors collectively contribute to the downward pressure on Nvidia’s stock, as they signal potential shifts in demand and increased competition in the AI hardware market$NVIDIA(NVDA)$