Nvidia (NVDA) Stock Drops as Israel-Iran Tensions Rattle Markets

TLDR

Table of Contents

Nvidia stock fell 1.8% in premarket trading Friday to $142.41 following broader market decline after Israel attacked Iran overnight
UBS maintained buy rating with $175 price target, citing $1.5 trillion AI infrastructure investment opportunity over next several years
CEO Jensen Huang announced new European partnerships and AI technology centers across six countries during Paris conference
Oracle’s strong earnings beat and bullish outlook boosted sentiment for AI-linked stocks earlier this week
Nvidia expects $40-50 billion revenue per gigawatt of AI data center capacity, potentially reaching $400 billion annually

Nvidia shares dropped in premarket trading Friday morning as geopolitical tensions rattled global markets. The stock fell 1.8% to $142.41 before regular trading hours.

The decline came after Israel launched attacks on Iran overnight. This put investors in a defensive mood across all sectors.

Despite the early weakness, Nvidia remains close to record highs. The stock hit an all-time peak of $149.43 on January 6.

Shares are trading roughly flat over the past week. The stock has also posted gains for both the month and year so far.

The chip giant sits less than 5% below its record high. This shows the stock’s resilience despite daily volatility.

Other semiconductor stocks also fell in premarket trading. Advanced Micro Devices dropped 1.6% while Broadcom declined 2.4%.

Marvell Technology fell 3.6% in early trading. The weakness spread across the entire chip sector.

Strong AI Investment Pipeline Supports Long-Term View

UBS analysts remain bullish on Nvidia’s prospects despite the short-term weakness. The investment bank maintained its buy rating and $175 price target on Tuesday.

The firm highlighted Nvidia’s visibility into $1.5 trillion of AI infrastructure investments. These projects are expected to unfold over the next several years.

This massive investment pipeline aligns with previous company statements. Nvidia has talked about “tens of gigawatts” of projects within a two-to-three-year window.

UBS noted that Nvidia’s customer base continues to expand. Demand now extends beyond U.S. cloud giants to include sovereign states and traditional industries.

The company’s supply chain and software capabilities are scaling to meet this demand. Product development cycles are also accelerating to keep pace.

Nvidia expects to generate $40-50 billion in revenue per gigawatt of AI data center capacity. This could translate to roughly $400 billion in annual datacenter revenue.

That projection is double UBS’s current 2026 estimate of $233 billion. The gap suggests potential upside to current forecasts.

European Expansion Plans Take Shape

CEO Jensen Huang made several announcements during his European tour this week. He spoke at Nvidia’s AI developers conference in Paris on Wednesday.

🚀 NVIDIA just unveiled its next-gen AI roadmap at #GTCParis:
-AI factories for large-scale deployment
-Advanced robotics with new AI models
-National-scale AI clouds for sovereign tech
Here’s a breakdown of the most important announcements 👇
(Fun fact: Their first AI… pic.twitter.com/DcEBKEykb7
— The Daily Ai (@The_DailyAi) June 13, 2025

Huang unveiled plans for new AI technology centers across six European countries. These include Germany, Sweden, Italy, Spain, the U.K., and Finland.

The company also announced expanded partnerships with European firms. These deals could strengthen Nvidia’s position in international markets.

Oracle’s recent earnings provided another boost to AI sentiment. The software company beat quarterly expectations and issued an upbeat outlook.

Oracle projected strong growth in its cloud infrastructure business. Deutsche Bank analysts noted this helped improve the mood for AI-related stocks.

Nvidia has staged a strong recovery since hitting a 52-week low of $94.31 on April 4. That decline followed President Trump’s announcement of sweeping global tariffs, though most were later paused.

The stock’s comeback reflects continued confidence in AI demand trends. Friday’s premarket decline appears more tied to geopolitical events than company-specific concerns.

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