Nvidia’s stock dropped by more than 3% following the announcement of its new generation of artificial intelligence (AI) chips at the annual GPU Technology Conference (GTC) in San Jose, California, on Tuesday. Despite unveiling advanced AI chips aimed at powering robotics and self-driving cars, investors reacted cautiously, continuing to sell off tech shares due to economic concerns surrounding Trump’s tariffs. The broader tech sector, including companies in the “Magnificent Seven,” also saw declines as global economic uncertainty weighed on market sentiment.
Nvidia Faces Investor Concerns Despite New Chip Launch
Nvidia, a leader in AI technology, has experienced a 15% drop in stock value this year, driven by global risk factors and the rise of competitive products. One such challenge comes from the Chinese startup DeepSeek, whose new, affordable AI model has caught attention in the market, potentially threatening Nvidia’s dominance. Adding to the pressure, Nvidia’s recent earnings report revealed signs of slowing sales growth, further fueling investor hesitation.
However, some market experts, like Josh Gilbert, a market analyst at eToro Australia, believe that the dip in Nvidia’s stock could present a buying opportunity. “Investors may see that as an opportunity, particularly with its valuation remaining attractive on the backdrop of ongoing growth,” Gilbert explained.
Despite the recent challenges, Nvidia’s CEO, Jensen Huang, remains optimistic about the future of the company’s products and its role in the rapidly growing AI sector. As the company prepares for its next-generation chip launch, Huang emphasized that Nvidia’s focus is on creating versatile, high-performance technology for AI applications, which he believes will drive continued demand.
Key Announcements at GTC 2025
At the GTC event, Nvidia introduced significant updates to its chip lineup, including the successor to its Blackwell supercomputing chip. The new model, named Blackwell Ultra, is set to begin shipping in the second half of 2025. This upgrade is designed to handle more complex tasks, enabling cloud providers to generate up to 50 times more revenue compared to the previous Hopper GPU generation. “We designed Blackwell Ultra for this moment — it’s a single versatile platform that can easily and efficiently do pretraining, post-training, and reasoning AI inference,” said CEO Jensen Huang during the keynote.
In addition to Blackwell Ultra, Nvidia announced Vera Rubin, a groundbreaking supercomputing system combining CPU and GPU capabilities. Expected to launch in late 2026, Vera Rubin is designed to handle an impressive 50 petaflops of processing power, more than double the capacity of the current Blackwell chips. This advanced system will be pivotal in further strengthening Nvidia’s position in the AI chip market, especially as demand for more powerful computing systems continues to rise.
The Growing Challenge from Competitors
Nvidia’s competitive landscape is rapidly shifting. The rise of DeepSeek, a Chinese AI startup, has already started to disrupt the market. DeepSeek’s cost-effective generative AI model presents a challenge to Nvidia’s dominance in AI chip sales, especially as it attracts attention for offering a similar level of performance at a lower price. This new competition has prompted Nvidia to focus on maintaining its edge by developing more advanced and versatile chips.
Nvidia’s ability to persuade hyperscalers—companies investing in large-scale computing infrastructure—will be crucial in sustaining demand for its next-generation chips. The success of Blackwell Ultra and other new products will depend on how effectively Nvidia can meet the evolving needs of AI developers and businesses that rely on high-performance computing for their operations.
Investor Sentiment and Market Outlook
As Nvidia navigates these challenges, investor sentiment remains mixed. The company’s stock has been affected not only by external market pressures, like tariffs and global uncertainty, but also by concerns over its ability to maintain growth in the face of increasing competition. Nvidia’s next steps will be critical in shaping its future in the AI industry.
While some investors remain cautious, others see long-term potential in Nvidia’s continued innovation. The company’s upcoming product launches, including Blackwell Ultra and Vera Rubin, are expected to play a pivotal role in maintaining Nvidia’s leadership in the AI and supercomputing sectors.
Nvidia’s new AI chips are a significant step forward, but the company faces considerable challenges as global economic uncertainties and rising competition threaten its market position. While its stock has fallen in the short term, Nvidia’s focus on innovation and its ongoing efforts to secure key partnerships could help it weather the storm. As the AI landscape evolves, Nvidia’s ability to adapt and lead the market will be essential to its continued success.
