Nvidia Faces Market Headwinds Despite Strong Demand for AI Products
Nvidia (NASDAQ: NVDA) saw substantial growth last year as demand for its artificial intelligence (AI) products surged, particularly among major tech companies. These firms are competing in the AI landscape and require Nvidia’s advanced tools to enhance their platforms. However, in recent weeks, despite record earnings and continued strong demand, Nvidia’s stock price has experienced a decline. This trend is not unique to Nvidia; it is prevalent across the market amid concerns surrounding President Donald Trump’s import tax proposals.
Last month, Trump announced an initial tariff plan but subsequently paused it to negotiate with various countries. Although electronic products, including AI chips, are currently exempt from these tariffs, this exemption is not guaranteed. Investors worry that tariffs could raise prices, impacting companies in two significant ways: (1) reduced demand for their products and (2) increased expenses. However, Nvidia appears well-positioned to navigate potential tariff challenges, having recently increased its production capacity in the U.S. Moreover, the company boasts $43 billion in cash reserves, providing it with the financial strength to weather potential obstacles.
Keynote at Computex on May 19
Nvidia CEO Jensen Huang will be delivering a keynote speech at Computex, a prominent AI conference in Taiwan, on May 19. This event, which continues through May 23, will focus on “AI Next,” encompassing topics such as AI and robotics, next-generation technology, and future mobility. Presentations involving Nvidia and its partners will cover various sectors, including manufacturing and life sciences.
Investors are keenly awaiting updates during Huang’s keynote, known for its engaging content and significant announcements. For instance, in his previous keynote at GTC in March, Huang unveiled the roadmap for forthcoming launches, including the Blackwell Ultra chip and the Vera Rubin architecture. He indicated that Blackwell Ultra is expected to release later this year, with Rubin on track for the second half of 2026. Additional details about these products could emerge at Computex.
Possible Blackwell Rollout Discussion
Huang may also address the ongoing rollout of the Blackwell architecture, which launched recently, and discuss the potential for increased production of AI infrastructure in the U.S. Nvidia’s recent announcements about boosting domestic manufacturing add to the anticipation. Insights into the future could bolster enthusiasm around Nvidia’s AI growth trajectory, leading to positive movements in the stock.
Should you invest in Nvidia before the keynote on May 19? The answer is nuanced. If you plan to hold shares long-term, there’s no urgency to purchase immediately. Timing the market to buy at a low and sell at a peak is nearly impossible, so a more prudent strategy is to invest in fundamentally sound companies when they are reasonably valued. Currently, Nvidia trades at 26 times forward earnings estimates, which is deemed reasonable. Even if the stock rises post-Computex, it is unlikely to become overvalued quickly.
Investment Opportunities Ahead
Given the current landscape, purchasing Nvidia shares now—or following the AI event later this month—could be a wise choice.
Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
