Wall Street AI company Nvidia Corporation (NASDAQ:NVDA) fell on Monday after reports that its executives met with Chinese officials. The stock price drop comes amid Nvidia’s strong performance last week, which exceeded expectations.
As reported by the South China Morning Post, China’s Vice Minister of Commerce Wang Shouwen met with Jay Puri, executive vice president of Worldwide Field Operations for NVIDIA’s global business, on Monday, November 25th. Puri’s meeting emphasized the importance of China as a key market for Nvidia. Meanwhile, Minister Wang Shouwen said in a statement that he emphasized the opportunities for foreign companies in an open China and welcomed NVIDIA to deepen ties in the country.
The meeting comes ahead of expected tougher U.S. regulation of China’s semiconductor industry, which could be announced early this week. Outgoing US President Joe Biden’s administration is expected to soon impose new export controls on China, with the new regulations potentially putting up to 200 Chinese semiconductor companies on a trade blacklist. Reuters reported that there is. Additionally, further restrictions on US shipments of high-bandwidth memory chips to China are expected to be announced next month.
This news has increased uncertainty in the market, and investors appear to be pricing in these risks. Amid these risks, the challenge for NVIDIA Corporation (NASDAQ:NVDA) is to meet the market’s sky-high expectations. Wall Street expects Nvidia’s revenue to increase 54% in 2025. While it’s true that demand for Nvidia’s chips continues to gain momentum, any small setback or uncertainty could negatively impact the stock due to such expectations.
If the pressure on NVIDIA Corporation (NASDAQ:NVDA) wasn’t already enough, the chip stock is competing with Apple for the title of the world’s most valuable company. With market capitalizations of around $3.5 trillion each, the stakes are high in meeting market expectations.
Our Research Director shared his thoughts on NVDA’s earnings results here. He believes NVDA stock could reach $170 within three months. While we acknowledge NVDA’s potential as an investment, we believe some AI stocks are more likely to deliver higher returns and do so in a shorter time frame. If you’re looking for AI stocks with more promise than NVDA, but trading at less than 5x earnings, check out our report on the cheapest AI stocks.
Read next: BlackRock’s 8 Best Widemot Stocks to Buy Now and 30 Most Important AI Stocks.
Disclosure: None. This article was originally published on Insider Monkey.
