By Trefis Team
Publication Date: 2025-11-14 13:26:00
NVIDIA (NVDA) has faced challenges in the past. Its stock has dropped over 30% within less than 2 months on 8 occasions in various years, erasing billions in market value and eliminating substantial gains in a single correction. If past performance is any indicator, NVIDIA (NVDA) stock is not shielded from abrupt, steep declines.
SAN JOSE, CALIFORNIA – MARCH 18: Nvidia CEO Jensen Huang delivers the keynote address during the Nvidia GTC 2025 at SAP Center on March 18, 2025 in San Jose, California. The annual Nvidia GTC conference runs through March 20th. (Photo by Justin Sullivan/Getty Images)
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Although NVIDIA’s stock has skyrocketed due to the unwavering demand for its AI hardware, elevating its market valuation to record levels, this very momentum also introduces new risks. The relentless demand for AI chips has sparked increased competition from rivals and even its top cloud clients who are designing their own proprietary silicon, while ongoing geopolitical issues highlight the fragility of its vital supply chains, suggesting that even with market leadership, there can be underlying uncertainties.
What Could Cause The Stock To Plunge?
- China Market Decline: U.S. export restrictions and rising domestic competition from companies like Huawei are expected to decrease NVIDIA’s AI chip market share in China, which would affect a substantial market opportunity.
- Custom AI Chips: Major hyperscalers (Google, Amazon, Meta) are increasingly creating their own custom AI…
