TLDR
- Nvidia (NVDA) stock rose 2.2% in premarket trading after recent losses of 17% over the past month
- Investors concerned about Trump’s tariff plans and potential restrictions on chip exports to China
- Taiwan Semiconductor Manufacturing Co. has reportedly pitched Nvidia, AMD, and Broadcom about taking stakes in a joint venture to operate Intel’s factories
- Nvidia’s automotive revenue expected to nearly triple to $5 billion this year
- Despite recent stock decline, analysts remain bullish with Citi maintaining a Buy rating and $163 price target
Nvidia shares rose 2.2% to $111.11 in premarket trading on Wednesday. This continues the positive momentum after closing up 1.7% in the previous session.
The chip manufacturer has experienced a challenging period, with its stock dropping 17% over the past month through Tuesday’s close. This decline occurred as investors worried about the potential impact of President Donald Trump’s tariff plans.
Market participants are specifically concerned that these tariffs could slow economic growth and trigger inflation. Both factors could negatively affect chip sales across the industry.
A particular worry for Nvidia investors is the possibility of tariffs being placed on Taiwan. This is a critical issue since Taiwan is where Nvidia’s chips are manufactured.
Additional concerns involve further restrictions on semiconductor exports to Chinese customers. These potential export curbs represent another regulatory hurdle for the company.
Despite these challenges, Citi analyst Atif Malik remains optimistic about Nvidia’s prospects. Malik maintained a Buy rating with a $163 price target on Nvidia stock.
“We believe investors are looking for a clearance event on the AI restrictions and tariffs impact to gross margins, which we don’t believe Nvidia is in a position to comment currently,” wrote Malik in a research note on Wednesday.
The Trump administration’s push to boost semiconductor manufacturing in the United States could also impact Nvidia’s future. This initiative aims to reduce dependence on foreign chip production.
According to Reuters, Taiwan Semiconductor Manufacturing Co. has approached Nvidia and rival chip designers like Advanced Micro Devices and Broadcom. The proposal involves taking stakes in a joint venture to operate Intel’s factories.
Financial performance remains strong
While Nvidia has faced recent stock volatility, the company’s financial performance remains strong. This resilience was evident in its fourth quarter fiscal 2025 results, which exceeded market expectations.
The company’s data center business has been a particular highlight in recent years. This segment has experienced substantial growth due to high demand for Nvidia’s GPUs used in training artificial intelligence models.
Nvidia is also actively targeting the AI inference market. AI inference represents the next stage after training, where AI models are put to work solving real-world problems.
According to company statements, Nvidia’s latest Blackwell AI chips are specifically designed with AI inference capabilities in mind. Nvidia CFO Colette Kress noted that many early deployments of its Blackwell systems are “earmarked for inference, a first for a new architecture.”
Nvidia’s growing automotive business
Another growth area for Nvidia is its automotive business. The company generated $1.7 billion in automotive revenue in fiscal 2025, a 5% increase from the previous year.
Management expects automotive revenue to nearly triple this year to approximately $5 billion. This growth will be driven by increasing compute demands in vehicles supporting autonomous functions.
Nvidia has built relationships with major automotive companies including Toyota, Hyundai, Uber, BYD, Volvo, and Mercedes-Benz. These companies are developing automotive solutions using Nvidia’s hardware and software offerings.
Overall, Nvidia’s total addressable market across different segments stands at an estimated $1.7 trillion. With fiscal 2025 revenue of approximately $131 billion, the company appears to have substantial room for continued growth.
Analysts project Nvidia’s earnings could reach $6.42 per share by fiscal 2028. If the stock trades at 30 times earnings at that time, its price could potentially reach $193, representing a 75% increase from current levels.
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