Nvidia stock (NVDA) is continuing its slump to start 2025, falling another 3% during Monday’s trading session. The stock’s recent performance has Wall Street experts fearful of a looming correction that would reverse NVDA’s momentum to close out last year. The fall would put the company’s shares on the cusp of entering correction territory after a 10% drop.
Nvidia and the rest of the tech market are facing significant pressure to open in 2025. Rising Treasury yields and innovative U.S. export restrictions on AI technologies massively affect investor confidence in tech/AI stocks. The Biden administration’s new rules ban the export of AI tech to countries like Israel, Singapore, Saudi Arabia, and the UAE. China, Russia, and others are still barred as well. Commerce Secretary Gina Raimondo says preserving U.S. dominance in AI development and chip design was a key reason. However, Nvidia was a strong opponent to these new rules, as it hosts key operations in Asia. Nvidia gets 40% of its revenue in the U.S. and 15% each from Taiwan and China
Nvidia (NVDA) has become a leader in the tech industry, pushing its way into the Magnificent-7 stocks on the US market. In the last five years, its stock has climbed a massive 2,130.85%, far surpassing any other Mag-7 member. Only Tesla’s stock (TSLA) growth in that span comes close, still nearly 1000% below Nvidia’s climb. Most experts predict Nvidia to continue that growth this year, but new regulations are stalling that growth.
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As a result of the recent restrictions, some analysts are revising their bullish predictions for Nvidia stock. HSBC analyst Frank Lee cut his price target to $185 a share but maintained a ‘buy.’ Lee said Nvidia’s potential headwinds in the first half of its fiscal year, beginning in February, may necessitate a stronger second-half performance to meet expectations. Lee also lowered Nvidia’s expected data center revenue for the fiscal year to $236 billion from $253 billion and cut the company’s sales estimates on the NVL 72 AI server racks to 220k. Fortunately, the analyst still projects Nvidia to beat earnings per share in a bearish scenario.
Both retail and institutional funds are accumulating Nvidia stock relentlessly and riding the bull run over the past year. The buying pressure remains intact despite a recent price fall, with little to no dips in the charts. It may take more pressure from the incoming Trump administration to cause Nvidia to dip further, which won’t likely come.
