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Nvidia’s influence on stocks may be fading, say analysts

In this post:

  • MediaTek and Samsung’s stock is down by 6%.
  • Nvidia’s shares have also dropped 12%.
  • There’s a chance Jensen Huang’s comments won’t carry the same weight as they did last year.

Nvidia still has the stock-boosting power, but its strength may be waning as some investors wonder how long it will last. The stock market is generally in the red, with the tech-heavy Nasdaq plunging as new regulatory measures introduced by President Biden have severely impacted artificial intelligence (AI) stocks

The White House published new guidelines earlier this week to curb the sale of AI chips from U.S. firms such as Nvidia to specific countries and companies. The administration said the rules would “strengthen U.S. security and economic strength.”

According to a recent Bloomberg report, Nvidia founder Jensen Huang’s praise of Samsung Electronics memory chip capabilities last Wednesday prompted a 3% jump in the company’s shares.

MediaTek stocks also rose to an all-time high following the unveiling of a partnership with Nvidia at the CES trade show, where Huang gave the keynote address; however, both stocks have been down about 6% since then.

Even Nvidia itself has faced headwinds, with its shares dropping 12%. Business experts say geopolitical tensions, trade policies, and rising competition for investor attention are weighing on the sector and the company’s stock.

Nvidia stocks skyrocketed last year as AI chips were new

Nvidia’s influence on stocks may be fading, say analysts
Source: Bloomberg

Jung In Yun, CEO of Fibonacci Asset Management Global, said that this time, there’s a chance that Jensen Huang’s comments won’t carry the same weight as last year. He added, “Nvidia’s position is still dominant, but rivals are also rising, and we should increasingly focus on what non-Nvidia players are saying.”

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Ahn Hyunsang, CEO of the Korea Investment Research Institute, notes Nvidia’s dominance was more pronounced last year when AI chips were a novel concept, driving its stock to unprecedented heights. Hyunsang notes things are slightly different this year as Trump and Musk are poised to wield significantly more influence.

Tech stock declines also recently came from concerns around Federal Reserve rate cut delays and U.S. AI chip export restrictions.

Nvidia’s record high stock powers market shifts while broader AI trends emerge

Still, the excitement around Nvidia isn’t cooling, as its stock reached an all-time high just last week. It can still inspire other companies’ shares to surge. The company’s performance continues to ripple, influencing other stocks.

Investors are waiting on comments from Huang this week as he tours China and Taiwan. For now, the market is hunting for new winners as the AI boom stretches into a third year. For instance, shares of Broadcom Inc. and Marvell Technology Inc. sharply outperformed Nvidia’s last month on developments with their latest chips.

These advancements suggest that the forces driving the AI industry are becoming more diverse. Yun from Fibonacci Asset warned that investors risk missing the bigger picture if they only follow Jensen Huang’s statements.

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