nvidia's ai leap: why the stock dipped despite new chip reveal
Santa Clara, Wednesday, 19 March 2025.
nvidia’s stock experienced an unexpected dip following the unveiling of its next-generation ai chips at gtc 2025. the market reacted with caution despite the company’s bold plans, including the blackwell ultra chip, which promises to enable cloud providers to generate 50 times more revenue than previous generation hopper gpus. collaborations with disney, google deepmind, and general motors signal long-term growth, but immediate investor concerns persist.
market reaction to gtc announcements
Nvidia’s stock experienced a decline of over 3% following the unveiling of its next-generation AI chips at the annual GPU Technology Conference (GTC) in San Jose, California [1]. This drop occurred despite CEO Jensen Huang’s presentation of the Blackwell Ultra and other advanced technologies [2]. The market’s reaction suggests investors are weighing the immediate costs and potential overspending in the AI sector against Nvidia’s long-term growth prospects [5]. Some analysts believe this dip presents a buying opportunity, considering Nvidia’s attractive valuation given its ongoing growth [1].
blackwell ultra and vera rubin
The Blackwell Ultra, slated for release in the second half of 2025, is designed to significantly boost revenue for cloud providers, potentially enabling them to generate 50 times more revenue compared to the previous Hopper GPUs [1]. Furthermore, the Vera Rubin system, expected in the latter half of 2026, aims to manage 50 petaflops during inference, more than doubling the capabilities of current Blackwell chips [1]. Huang emphasized that Blackwell Ultra is a versatile platform for pre-training, post-training, and AI inference [1].
collaborations and future prospects
Nvidia has announced several key collaborations that could bolster its market position [1]. These include partnerships with Walt Disney and Google DeepMind on the Isaac GR00T N1 project, General Motors for next-generation automotive AI, and T-Mobile US and Cisco Systems for developing AI-powered 6G network hardware [1]. These collaborations highlight Nvidia’s expanding influence across various sectors and its commitment to driving innovation in AI technology. Hyperscalers are projected to invest heavily in AI infrastructure, with spending expected to reach $371 billion in 2025 and $525 billion by 2032 [1].
analyst perspectives and market sentiment
Despite the stock’s recent underperformance, with a year-to-date decline of approximately 14% compared to the Nasdaq’s 9% drop, some analysts remain optimistic [5]. Josh Gilbert, a market analyst at eToro Australia, suggests investors may see the dip as an opportunity, especially given Nvidia’s valuation relative to its growth [1]. Nvidia’s stock recently traded at 25 times expected earnings, which is below its five-year average forward price-to-earnings ratio of 40 [5]. This could signal that the stock is undervalued relative to its potential [alert! ‘Need to confirm if analysts still consider it a buy given recent events’].