NVIDIA’s Market Performance: Navigating Challenges and Growth Potential
NVIDIA Corporation (NVDA), with a market cap of $2.7 trillion, stands as a leading American technology firm specializing in graphics processing units (GPUs), artificial intelligence (AI), and accelerated computing. Established in 1993 and based in Santa Clara, California, NVIDIA has evolved from primarily providing gaming graphics to becoming a key player in AI and data center technologies.
Share Performance and Market Comparison
Over the past year, NVDA shares have outperformed the broader market, gaining 26.1% compared to a 10.6% increase for the S&P 500 Index ($SPX). However, in 2025, NVDA has experienced an 18.9% decline, while $SPX has only fallen by 5.3% year-to-date.
In contrast, NVIDIA has also outperformed the S&P Semiconductor SPDR (XSD), which has dropped 14.1% over the past year and 22.3% this year.
Factors Contributing to Recent Performance
NVIDIA’s underperformance in 2025 can be attributed to high investor expectations, geopolitical tensions, and mounting competition. Although the company continues to deliver robust earnings, results have failed to meet increasingly optimistic forecasts, resulting in some investor disappointment. Additionally, U.S. export restrictions on AI chips to China have negatively impacted NVIDIA’s revenue outlook, especially with rising competition from companies like Huawei.
On April 30, NVDA shares dropped 2.5% amid overall market weakness and concerns about economic indicators, including a surprising 0.3% decline in U.S. GDP for Q1 and slowed consumer spending. Moreover, major customer Super Micro Computer, Inc. (SMCI) withdrew its Q3 revenue and earnings guidance, citing delays in customer platform decisions, raising worries about the demand for NVIDIA’s AI chips.
Future Earnings Outlook
For the fiscal year ending in January 2026, analysts predict NVDA’s earnings per share (EPS) will grow 36.9%, reaching $4.01 on a diluted basis. Notably, NVIDIA has consistently surpassed earnings expectations, achieving this in each of the last four quarters.
Analyst Ratings and Price Targets
Among the 42 analysts covering NVDA, the consensus is a “Strong Buy.” This includes 37 “Strong Buy” ratings, two “Moderate Buys,” and four “Holds.” This positive outlook has remained stable in recent months.
On April 25, Morgan Stanley (MS) slightly lowered its price target for NVIDIA to $160 from $162 but kept an “Overweight” rating, citing strong GPU demand due to a global shortage of inference chips for large language models. Despite existing macroeconomic and supply chain issues, the firm considers the idea of an AI slowdown to be unlikely, noting the rapid growth of demand in this sector.
The average price target stands at $166.10, representing a 52.5% premium over NVDA’s current price. The highest target, set at $220, indicates an upside potential of 102%.
On the date of publication, Kritika Sarmah did not hold positions in any securities mentioned in this article. All information is for informational purposes only. Please view the Barchart Disclosure Policy here.
The views expressed herein are solely those of the author and do not necessarily reflect the opinions of Nasdaq, Inc.
