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When Nvidia traded above $140 ahead of its earnings report, bulls thought the stock had more room to climb. After it posted earnings, Nvidia stock fell sharply, closing from above $130 to $114.06 on Monday.j
The stock is not down due to the graphics chip designer’s gaming chip launch. Nvidia claimed that the missing ROPs, specialized units in GPU, affected only 0.5% of the RTX 5090 cards. Nvidia stock is down on fears that Chinese firms found ways to buy its chips. In addition, ongoing worries about Trump tariffs hurt NVDA stock.
Nvidia trades at high relative valuations. Its non-GAAP P/E is 41.75 times, compared to the 23.7 times sector median. However, the PEG non-GAAP (forward) is 0.81 times. This is below the 1.7 times multiple sector median.
Nvidia’s drop hurt Advanced Micro Devices (AMD), which closed below $100 at $98.23. Qualcomm (QCOM), Texas Instruments (TXN), ARM, and Micron (MU) are also in a short-term downtrend.
The U.S. may not easily prove that Chinese buyers acquired Nvidia’s newest AI chips. Still, the companies may easily register outside of China. Companies listed in Vietnam, Taiwan, or Malaysia may obtain the latest Blackwell AI chip without scrutiny.
If the U.S. cracks down on this arrangement, Nvidia’s chip sales could fall. That would set off a chain reaction of panicked selling in AI-related chip names. Customers like Alphabet (GOOG) and Microsoft (MSFT) may slow their spending on hardware as the AI industry slows.
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