Nvidia Stock Falls Even After AI Chip Announcements
Despite a wave of exciting announcements at Computex 2025, Nvidia stock closed flat as market-wide jitters and tariff fears weighed on investors.
Summary
- Nvidia stock traded flat Monday after initially dropping 3% despite big AI reveals at Computex.
- Market concerns over US credit downgrade and tariff policies contributed to investor caution.
- AI chip innovations, including NVLink Fusion, failed to lift NVDA in the short term.
Nvidia’s Big Reveal at Computex
At the Computex tech expo in Taipei, Nvidia introduced major updates to its AI chip strategy. The most notable was NVLink Fusion, which will allow customers to create semi-custom AI servers using both Nvidia chips and those from third-party partners like Marvell Technology and Alchip. This opens the door to more flexible AI hardware setups while still keeping Nvidia at the center of AI infrastructure.
Analyst Vivek Arya of Bank of America praised the move, noting it expands Nvidia’s “addressable market” and highlights its strong ecosystem of silicon, software, and global supply-chain partners like Saudi Arabia’s Humain.
So Why Did Nvidia Stock Fall?
Despite these innovations, Nvidia stock couldn’t maintain momentum. The drop wasn’t about poor performance—it was broader market pressure. Moody’s lowered the US credit rating, stirring concerns about federal debt and fiscal instability. Adding to that, Treasury Secretary Scott Bessent warned that President Trump might reimpose paused tariffs if trade deals stall, spooking investors across the tech sector.
As a result, Nvidia fell 3% in early trading before bouncing back to flat by midday. Other chip stocks, including Qualcomm and Intel, also saw minor losses.
Analysts Still Bullish on NVDA
Even with the slight dip, Nvidia’s future looks strong. The company is dominating the AI chip space and positioning itself as the backbone of future AI factories. Arya reiterated a “Buy” rating, pointing to Nvidia’s solid financials, strategic partnerships, and rapidly expanding product lineup. Investors now await Nvidia’s next earnings report on May 28 for more insights.
Pros
- Major product updates expand Nvidia’s AI leadership
- NVLink Fusion adds flexibility and reaches more customers
- Strong analyst confidence and global partnerships
Cons
- Stock remains sensitive to macroeconomic news
- Tariff concerns continue to overshadow tech momentum
- Market volatility may limit near-term upside
Conclusion
Despite short-term headwinds, Nvidia stock remains a top player in the AI chip space. New features like NVLink Fusion show the company’s commitment to staying ahead in a growing multitrillion-dollar market. Investors may be jittery for now, but Nvidia’s strong fundamentals and upcoming earnings report could help refocus attention on long-term gains.
FAQs
Q: Why did Nvidia stock drop despite positive news?
A: Market-wide concerns over tariffs and credit ratings impacted all tech stocks, not just Nvidia.
Q: What is NVLink Fusion?
A: It’s Nvidia’s new tech that allows customers to build AI servers with chips from both Nvidia and partners like Marvell and Alchip.
Q: Is Nvidia still a good investment?
A: Analysts like Bank of America still rate it a “Buy” due to its dominant position in AI infrastructure and strong product pipeline.
