nvidia's ai deals: why investors are still worried

2025-03-11 nvidia

New York, Tuesday, 11 March 2025.
nvidia’s stock is facing headwinds. This is despite securing new deals with tech giants like Meta and OpenAI. Investors are concerned about decreasing hardware costs. This raises questions about nvidia’s future growth. The stock has already dropped 16% this year. One factor may be OpenAI’s move to develop its own AI chips. This reduces reliance on nvidia and could shake up the market.

market performance and analyst views

Nvidia’s stock experienced a 5.07% decline on March 9, 2025, with a trading volume of $38.943 billion [5]. Despite the recent downturn, Nvidia is scheduled to host its GTC AI conference, which could provide insights into the company’s future strategies and technological advancements [5]. A Bank of America report suggests that the AI sector is transitioning to a phase where revenue generation will face increased scrutiny relative to investments [3]. This shift in focus could impact how investors evaluate Nvidia’s growth potential and market position [3].

oracle’s role and cloud agreements

Oracle has announced new cloud agreements with Nvidia, Meta, and OpenAI, anticipating these deals will drive revenue growth in the coming year [2][7]. Despite these positive developments, Oracle’s stock has shown negative performance, with a 5-day decrease of 8.17%, a 1-month decrease of 16.84%, and a year-to-date decrease of 10.71% [7]. Oracle’s involvement underscores the interconnectedness of major players in the AI landscape, yet market reactions indicate broader concerns beyond individual partnerships [7].

meta’s ai initiatives and market impact

Meta’s stock also experienced a decrease of 4.42% on March 9, 2025, with a trading volume of $12.764 billion [5]. However, Meta’s generative AI-related revenue is projected to grow at a 67% compound annual growth rate, reaching $101 billion in 2028, a substantial increase from $13 billion last year [3]. Meta has a substantial user base with over 700 million monthly average users for its AI, expecting to reach 1 billion in 2025 [3]. These figures highlight Meta’s significant investments and potential returns in the AI sector, even as its stock faces short-term pressures [3].

competition and market dynamics

The AI landscape is becoming increasingly competitive, with companies like xAI, led by Elon Musk, vying for dominance in generative AI [4]. OpenAI’s annual revenue run-rate is $3.4 billion, up from $2 billion in January 2025, and the company has secured $6.6 billion in new funding, valuing it at $157 billion [3]. Other companies are also making significant strides; for instance, Foxconn recently announced that Nvidia assisted them in developing a large-language AI model [6]. These developments signal a dynamic market where Nvidia faces both collaboration and competition, influencing investor sentiment [4][6].

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ai chips stock performance