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Nvidia (NVDA) shares are sinking this morning as investors digest what China-U.S. trade tensions could mean for the artificial intelligence behemoth in 2025.
According to recent reports, Beijing is advising local businesses against using Nvidia chips as they violate its latest energy efficiency rules.
Meanwhile, President Donald Trump’s administration added more than 50 Chinese companies this week to its trade blacklist, effectively blocking NVDA from doing business with these firms.
Including today’s decline, Nvidia stock is down more than 25% versus its year-to-date high.
How to Play Nvidia Stock in the Near Term?
While trade tensions between China and the United States could evidently hurt Nvidia’s sales, how you’d play this AI stock at writing depends on your time horizon.
In the near term, NVDA investors should brace for more “turbulence,” according to former hedge fund manager, Jim Cramer.
However, he remains convinced that the chip giant will play a crucial role in the brewing AI-enabled industrial revolution, which is why owning Nvidia stock for the long term continues to be a smart move.
Plus, Nvidia’s annual GTC conference last week confirmed that recent concerns of a potential AI slowdown ahead are, in fact, egregiously overblown.
Are NVDA Shares Attractive for the Longer Term?
Nvidia investors are recommended to tread with caution in the near term also because the stock has recently made the dreaded “death cross” on the daily chart.
Death cross is a technical indicator that signals continued bearish momentum ahead. It appears when a stock’s 50-day MA crosses below the 200-day MA as shown in the chart below.
For the longer term, however, Nvidia shares remain worth owning as the company’s management guided for $43 billion in revenue for its current financial quarter in February.
The number translates to a much better-than-expected 65% growth on a year-over-year basis that effectively invalidates recent fears of an AI slowdown.
Could Nvidia Make a New All-Time High in 2025?
All in all, while the macroeconomic environment is not particularly exciting for Nvidia stock at writing, analysts are keeping positive on the AI darling for the next 12 months.
The consensus rating on NVDA shares currently sits at “Strong Buy” with the mean target of about $177 indicating potential upside of more than 55% from current levels.
