Nvidia’s stock has been trading sideways for four months as investors weigh various factors affecting the company’s performance. The uncertainty stems from the sustainability of data center demand for artificial intelligence chips, which could be impacted by the new Trump administration. Wall Street analysts are generally positive about Nvidia’s prospects this year, with 61 analysts holding a buy rating and five a hold rating.
In January, Nvidia’s stock hit a record high after CEO Jensen Huang outlined the company’s vision for agentic AI and physical AI at the CES 2025 conference. However, concerns lingered about hyperscale cloud computing customers slowing their purchases of AI processors. Investors will get insights into AI data center demand from upcoming Big Tech earnings reports.
Nvidia’s next earnings report is due on February 26, and the company’s GTC conference, starting March 18, may provide a catalyst for the stock. However, Nvidia faces potential business challenges from changes in U.S. policy under President Trump, including export restrictions on AI chips and systems.
The company also faces increased competition from custom AI chips from Broadcom and Marvell Technology. Analyst Tom O’Malley predicts that custom ASICs will reach 45% of total spending in the inference accelerator market by 2028, up from 7% now. Despite these challenges, Nvidia remains a dominant player in the AI revolution, with analyst Mark Lipacis maintaining an outperform rating and a price target of 190.
Nvidia’s data-center compute business is expected to grow nearly 60% year over year in 2025, according to O’Malley. The company’s full-stack AI system provider status and upside potential from custom AI chip plays make it a compelling investment opportunity.
Source: https://www.investors.com/news/technology/nvidia-stock-treading-water-risks-catalysts