Nvidia Stock Decline Accelerates Amid Signs of Diminishing AI Chip Demand, Says Microsoft CEO

Nvidia Stock Correction Accelerates Amid Shifting AI Chip Demand

Source: Business Insider

Overview of Stock Decline

• Nvidia's stock has *dropped 17%* from its record high of $152.89 set in November.
• The decline brings Nvidia closer to entering a *bear market*, defined as a 20% drop.

Impact of Microsoft's CEO Comments

• Microsoft CEO Satya Nadella suggested that the *frenzied demand* for AI chips may be *waning*.
• Post-comments, Nvidia's shares have fallen by *7%*.
• Nadella indicated that Microsoft is not *chip supply constrained*, affecting Nvidia, which relies on Microsoft for about *20% of its revenue*.

Analyst Perspectives

• Wedbush analyst Dan Ives views Nvidia’s decline as a *temporary dip*, assuring strong future AI prospects.
• Despite the downturn, Ives recommends that investors see this as a *buy-the-dip* opportunity.

Market Dynamics and Future Outlook

• Comments from industry leaders suggest progressing in AI may face *significant challenges* moving forward.
• Analysts note a *backlog of orders* for Nvidia’s next-generation Blackwell GPU chip continues despite current stock declines.
• The market may also be rotating investments from Nvidia to other companies like *Broadcom*, which reported strong AI business growth.

Conclusion

• While current trends indicate a cooling in demand for AI chips, Nvidia remains a robust player in the sector, with strong long-term prospects highlighted by industry analysts.