"Like its fellow Magnificent 7 members, Nvidia struggled due to economic uncertainties about the effects of tariffs, as well as due to Chinese AI innovations. Bears saw Nvidia stock falling further because of bearish pressure from the broader market. Yet, some investors remain optimistic for a sustained rebound, and that seems to have been the case. The stock returned to all-time highs as some tariff fears dissipated and macro data improved."
"The bearish argument that prevailed on Wall Street early this year is not entirely gone, though. While the AI rally may continue, it remains speculative, whereas the reasons for Nvidia stock's decline in the spring were genuine. Nvidia may still be at a crossroads right now. We do not know for sure where the stock will go next, but with the data on hand, we can speculate. That's what we are doing here."
"1. AI Infrastructure Dominance: Nvidia controls an estimated 80% of the AI accelerator market through its H100/H200 GPUs and CUDA software ecosystem. It is tough for Nvidia customers to switch to another supplier. This has allowed the company to dominate the industry, with customers returning year after year. As such, it is well-positioned to capture growth from the $400 billion AI chip market projected for 2030."
Nvidia experienced a downturn amid the China trade war, with shares falling below $87 in April before rebounding to all-time highs as tariff fears eased and macro data improved. The AI rally remains speculative, and earlier spring declines were driven by genuine factors. Nvidia controls an estimated 80% of the AI accelerator market via H100/H200 GPUs and the CUDA ecosystem, producing strong customer lock-in and positioning to capture a projected $400 billion AI chip market by 2030. Data-center revenue jumped from $4.3 billion in Q1 2023 to over $35.6 billion in Q4 2024. Sustaining leadership will require continuous GPU innovation, energy efficiency, and margin preservation amid uncertain market pressures.
Read at 24/7 Wall St.
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