Nvidia’s stock experienced an important decrease the decrease by 30% From its November 2024 peak of $ 153, resulting in a loss of approximately 1.1 billion of dollars in market value. This clear drop is largely due to the economic uncertainty which followed the American elections of 2024, which brought Donald Trump back to the post and introduces new pricing policies. Despite his announcement of a 90 -day break on certain prices, Nvidia faces major challenges. More specifically, the prices on Taiwan and China goods, where Nvidia products are largely manufactured, have increased spectacularly, the price of China reaching an amazing
Impact of costs on the costs and margins of Nvidia
The greatest concern for Nvidia This is how these prices will affect its product costs. With the increase in prices, the company faces the difficult decision to absorb these increased costs or transmit them to customers. The two scenarios could have negative effects on Nvidia’s growth, especially if higher prices lead to a reduction in demand. If Nvidia chooses to maintain its stable prices, the company can undergo a drop in beneficiary margins.
Nvidia’s response to tariff challenges
Nvidia remains positive in the face of these challenges. CEO Jensen Huang said that the company’s flexible supply chain, as well as a high demand for artificial intelligence (AI), should help reduce the short -term effects of prices. He also pointed out that Nvidia plans to move more from its production in the United States in the future, which could reduce dependence on foreign manufacturing and help manage some of the costs caused by prices. He added,,
“The prices will have a little impact for us in the short term. In the long term, we will have a manufacturing on earth. “
Huang too expressed confidence On the prospects of Nvidia AI, noting,
“We have managed to increase the massive production of blackwell ai superordinators, making billions of dollars in sales in the first quarter.”
Future prospects and financial forecasts
For the future, Nvidia’s growth projections seem to slow down. In its latest forecasts for financial year 2026, the company provides for slower income growth and a drop in beneficiary margins. The first quarter of the 2026 fiscal year should generate $ 43 billion in incomeup 65% compared to the previous year. However, the gross margin of the company should drop from 8.4 percentage points to 70.6%. These figures suggest that Nvidia can face more challenges to come, because its ability to achieve growth objectives will be tested by pricing uncertainties.
The role of AI and generative technology
Nvidia remains very optimistic about the future of AI, in particular generative AI, which should revolutionize industries. The emphasis on the company on AI supervisors and the growing demand for AI generating technologies could provide a stamp against the negative effects of prices. Huang noted,,
“The AI is progressing at a light speed while agentics and physical AI have prepared the ground for the next wave of AI to revolutionize the largest industries.”
However, the return on investment for a generative AI remains uncertain, which could have an impact on demand, especially if the economic conditions aggravate.
Risks to Nvidia’s growth
Several factors could affect Nvidia’s growth. If the market slows down or enters a recession, companies could spend less in AI generating technologies, which could reduce the demand for Nvidia products. In addition, higher prices caused by prices could make consumers and businesses less likely to buy GPUs and other expensive Nvidia products.
Global summary
In summary, the drop in NVIDIA shares is the result of several factors, including increased prices and economic uncertainty. Although the company remains optimistic about its AI prospects, the impact of costs on costs and margins, as well as potential reductions in IA generating expenses, could present significant risks to its growth. Investors will have to carefully take these factors when assessing Nvidia’s shares, in particular as the company’s profits in May 2025 could bring more light on the full impact of these challenges.