To The Moon

As of March 11, 2025, $NVIDIA(NVDA)$  has experienced a notable decline in its stock price, dropping from an all-time high of $153.13—reached on January 7, 2025—to $106.98. 

This roughly 30% plunge has shifted investor sentiment dramatically. Early in 2025, the market reveled in Nvidia's AI-driven ascent, with analysts like Morgan Stanley setting lofty targets near $152. Now, investors are starting to show doubt and impatience, with some questioning the AI boom's sustainability or fearing competition from firms like DeepSeek. 

Yet, beneath this volatility, Nvidia's fundamentals have largely strengthened or held firm, exposing a disconnect between jittery market perception and the company's robust underlying story.

Is it time to "buy the dip"?

The AI Boom Powers On

The cornerstone of Nvidia's rise—the unrelenting demand for AI compute power—shows no signs of slowing. 

Hyperscalers like Microsoft, Meta, and Google (Alphabet), alongside a surge of enterprise adopters, continue to fuel a data center boom. Analysts project cloud capital expenditures to climb 30-40% year-over-year to over $360 billion in 2025, with Europe adding another $300+ billion in AI infrastructure funding. Nvidia's data center revenue, which nearly doubled to $115 billion in 2024, remains supply-constrained, not demand-limited. 

Since the January peak, this catalyst has gained momentum, as evidenced by Bank of America's $190 price target on March 3, forecasting 61%+ growth for Nvidia's data center segment in 2025.

Blackwell's Breakout Moment

The Blackwell architecture has emerged as a standout success, solidifying Nvidia's technological edge. Launched amid high expectations, Blackwell delivered $11 billion in Q4 sales—exceeding forecasts—and is sold out through 2025, per CEO Jensen Huang's "extraordinary demand" remarks. 

Designed for advanced reasoning AI models (e.g., DeepSeek R1, OpenAI's o3), its rapid production ramp-up has temporarily pressured gross margins, with CFO Colette Kress projecting a return to the mid-70s by H2 2025. Since January, this catalyst has evolved from hype to proven results, reinforcing Nvidia's leadership post-peak.

Financial Strength Amid Minor Bumps

Nvidia's financial performance remains a pillar of strength, even as the stock dips. The company reported $39.33 billion in Q4 revenue—a 78% year-over-year leap—and issued Q1 2025 guidance of $43 billion, surpassing Wall Street's $38.25 billion Q4 estimate. 

While growth has slowed from triple-digit rates and margins face short-term compression from Blackwell costs, these are manageable hiccups. The market's reaction since January overemphasizes these nuances, ignoring the bigger picture: Nvidia's revenue and demand trends are as robust as ever, with no fundamental cracks evident.

Analysts remain extremely bullish on NVIDIA (as of 11 March 2025 - investing.com)

Market Leadership and the DeepSeek Reframe

Nvidia's near-monopoly in high-end AI chips remains unchallenged, despite competitive whispers. 

DeepSeek's low-cost AI model triggered a $600 billion market cap selloff in January, but Huang reframed it as a boon—reasoning models "consume 100 times more compute," boosting Nvidia's relevance. Wedbush's Dan Ives echoed this in Fortune, noting "no customer wants to 'lose their place in line' for Nvidia's next-gen chips." 

Since the $153.13 peak, this narrative has solidified: competitors like DeepSeek, as well as other chip makers, pose no immediate threat to Nvidia's pricing power or CUDA ecosystem, and Blackwell's demand underscores its dominance. 

The stock drop reflects sentiment, not a shift in fundamentals, which have arguably strengthened as Nvidia's role in the "4th Industrial Revolution" crystallizes.

@Tiger_comments