"The trade war with China was tough on Nvidia Corp. ( NASDAQ: NVDA) investors. In April, shares hit a year-to-date low below $87 apiece. 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 lately that seems to have been the case."
"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."
"Data Center Expansion: Its data center revenue has surged from $4.3 billion in Q1 2023 to over $35.6 billion in Q4 2024. Maintaining leadership here requires continuous innovation in GPU architecture and energy efficiency as AI workloads grow exponentially. So far, Nvidia has managed to do that."
Nvidia experienced a sharp decline to below $87 in April due to the China trade war, tariff worries, and rapid Chinese AI developments, but later returned to all-time highs as tariff fears eased and macro indicators improved. The AI rally remains speculative while earlier bearish pressures were substantive. Nvidia controls about 80% of the AI accelerator market via H100/H200 GPUs and the CUDA ecosystem, creating strong customer stickiness and positioning for a large AI chip market. Data center revenue jumped from $4.3 billion in Q1 2023 to over $35.6 billion in Q4 2024. Margin preservation amid rising competition remains a key risk.
Read at 24/7 Wall St.
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