AI tokens’ market-cap bleed 5% as Nvidia stock tumbles
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Nvidia and other AI chipmakers’ stocks are bleeding on the heels of Alibaba’s new AI model launch, with AI tokens’ market cap seeing a similar hit in response. Nvidia stock is down by 5.7% today, putting Nvidia shares down nearly 18% year-to-date, which marks the worst monthly performance for Nvidia since June 22, according to Yahoo! Finance. Source: Trading View Nvidia recently published its Q4 earnings for 2024 ending Jan. 26, reporting year-over-year revenue growth of 78% at $39.33 billion for the quarter, beating analyst estimates of $38.25 billion. However, even though Nvidia’s earnings exceeded analyst’s forecasts, the potential impact of DeepSeek concerned investors, who worried that it may reduce the demand for Nvidia’s chips in the future. However, Nvidia stated that DeepSeek increased the demand for its inferencing solutions, leaving investors puzzled as to what may be causing the recent tumble. Another concern was Nvidia’s profit margins, which were a bit lower than expected. According to Nvidia, this is mainly because they’re investing heavily in making their new Blackwell GPUs. Nvidia expects profit margins to recover by the second half of the year. Source: Nvidia Newsroom One key factor which might have sent Nvidia stock tumbling is the risk of tariffs being placed on Taiwan, where Nvidia manufactures its AI chips. If these tariffs are imposed, it could make Nvidia’s products more expensive to produce and sell, impacting its profitability. There’s also uncertainty about whether the U.S. will impose additional restrictions or expand the current ones. If this happens, it could limit Nvidia’s ability to sell its chips to Chinese customers, affecting its growth potential, especially given how significant China is in the global semiconductor market. Jim Cramer even sarcastically commented on X “Clownshow buyers of Nvidia, it went negative… now ok,” pointing to the market’s erratic reaction to…
Filed under: News - @ March 7, 2025 3:23 pm