Though Nvidia (NVDA, Financials) projects 57% year-over-year sales growth and a price-to-earnings ratio of 26, a level some analysts deem moderate, shares fell after its recent GTC developer conference.
According to Barron's, the post-GTC decline suggests investors may be increasingly cautious about the company's long-term outlook, reflecting broader concerns beyond near-term growth.
Three main dangers were mentioned. First, emerging as possible rivals to Nvidia's general-purpose graphics processing units are application-specific integrated circuits, or ASICs. Second, hardware component taxes could affect profitability. Third, demand for artificial intelligence accelerators might drop, particularly with the release of DeepSeek's R1, a lightweight agentic artificial intelligence system meant to lower infrastructure reliance.
Throughout GTC, Nvidia Chief Executive Officer Jensen Huang addressed these issues. Many ASIC orders are ultimately canceled, he added, and such chips have to be far better than Nvidia's GPUs if they are practical substitutes. He also discounted tariff-related concerns as having little effect on the near-term running of the business.
From the demand side, Huang said that agentic artificial intelligence applications will need far more processing capability—perhaps 100 times more than earlier projections—so preserving substantial need for Nvidia's hardware.
Providers of cloud infrastructure keep making large hardware investments in Nvidia. Compared with 1.3 million Hopper GPUs acquired the year before, Amazon Web Services, Microsoft Azure, Google Cloud, and Oracle Cloud allegedly ordered a combined 3.6 million Nvidia's new Blackwell GPUs for 2025.
Strong foundations and demand indications notwithstanding, Nvidia's market performance after GTC suggests residual uncertainty among investors negotiating a fast-changing AI terrain.
