Nvidia Stock Performance Update
Nvidia (NASDAQ: NVDA) has seen its stock decline approximately 12% over the past month due to rising concerns about the sustainability of the current AI enthusiasm. After reaching an all-time high in October, the stock’s recent slump raises questions about potential competition from other semiconductor companies.
Despite this decline, Nvidia reports annual profits of $99.2 billion, with analysts forecasting a nearly 44% growth in profits annually over the next five years. Particularly noteworthy are Nvidia’s operating profit margins of 59%, significantly higher than rivals like Advanced Micro Devices (AMD) and Qualcomm (QCOM), which typically operate in the low 50% range.
The Wall Street Journal warns of a potential price war as competitors enter the AI chip market, but highlights that major companies like Alphabet continue to spend heavily on Nvidia’s products, indicating sustained demand even amid competition.
