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Nvidia (NVDA) stock is under pressure. Shares of the chip maker have plunged more than 29% year-to-date, slipping below the $100 mark and even dipping below $90 on Monday, April 7. Further, NVDA stock has lost over 37% of its value from its 52-week high. Investor sentiment has soured amid fears surrounding President Donald Trump’s reciprocal tariff policies.
Although semiconductors have reportedly been placed on the list of exceptions in Trump’s proposed tariffs, the broader concern lies in how global trade partners might respond. Retaliatory tariffs from other nations could have a ripple effect across the semiconductor sector, potentially stifling growth or increasing costs in an industry already managing complex global supply chains.
Strong Fundamentals Amid Macro Headwinds
Despite the macro headwinds, Nvidia’s fundamentals remain strong, and its core data center business is likely to grow at a solid pace. In fiscal 2025, the company delivered $130.5 billion in revenue, marking a 114% increase from the previous year. The engine behind this explosive growth was its Data Center segment, which brought in $115.2 billion, driven by surging demand for its GPUs focused on artificial intelligence (AI).
Nvidia’s data center momentum is supported by solid demand for its Hopper and Blackwell platform. Notably, the company’s new Blackwell platform, which succeeded the popular Hopper architecture, has seen the fastest product ramp in Nvidia’s history. It raked in $11 billion in revenue in the fourth quarter alone. Designed for the next generation of AI workloads, Blackwell significantly reduces inference costs — by as much as 20 times compared to its predecessor, Hopper — while delivering massive gains in throughput. This suggests that demand for the platform is likely to remain high.
Despite some noise around lower-cost competitors like DeepSeek entering the market, demand for Nvidia's advanced chips remains robust. The global expansion of AI infrastructure and the increasing adoption of AI agents and reasoning models continue to support strong demand. Nvidia’s full-stack AI solutions — from chips to software — position it as the go-to partner for companies building out AI capabilities.
Big tech continues to drive demand. Major cloud providers are already deploying Nvidia’s GB200 systems, and spending from internet giants on Nvidia’s AI technologies has tripled. All these factors suggest that Nvidia's data center business will likely deliver solid growth in 2025 and beyond.
Beyond Data Centers: Diversification Expands Growth Potential
Nvidia’s product demand extends beyond data centers. Its technologies are now embedded in autonomous vehicles, robotics, healthcare, and manufacturing. This opens up a large addressable market for the company. Notably, the automotive sector alone brought in a record $1.7 billion in fiscal 2025, up 55% year-over-year.
Meanwhile, the gaming segment is expected to rebound as next-gen GPUs bring significant performance boosts and AI-enhanced graphics that elevate the experience. Professional visualization and enterprise AI are also gaining momentum. Healthcare organizations are also deploying Nvidia platforms for drug discovery and genomic research, highlighting the broad applicability of its tech.
Financial Resilience and Forward Guidance Offer Reassurance
From a financial perspective, Nvidia remains on strong footing. While the scale-up of Blackwell systems has temporarily impacted margins, management remains confident in a return to gross margins in the mid-70% range later this fiscal year.
Looking ahead, Nvidia has guided for $43 billion in revenue for Q1 of fiscal 2026, up about 65% year-over-year. Despite tough year-over-year comparisons, the data center business is expected to maintain robust growth thanks to continued AI investment across industries.
The Bottom Line
Thanks to the recent dip, Nvidia’s valuation has become much more attractive. NVDA stock is trading at a price-earnings (P/E) ratio of 18.4 times its projected earnings for fiscal year 2027. That’s a compelling figure considering the company’s strong earnings growth potential and its leadership in the booming AI market.
Wall Street remains bullish. Despite the recent plunge, the consensus rating on Nvidia is still a “Strong Buy.” Moreover, analysts’ average price target of $177.49 implies significant upside potential from current levels.
