The semiconductor giant Nvidia (NASDAQ: NVDA) soared more than 170% in 2024 and rightly became a stock market superstar once its performance since late 2022 is considered.
Despite the momentum and the bullish outlook, NVDA shares hit a rough patch in 2025, threatening on multiple occasions to drop below $100 for the first time since the brief dip in August of the previous year.
Since the year started, Nvidia stock has declined 13.55% to its press time price of $116.10. Furthermore, despite the latest session and the Thursday pre-market being positive and featuring a 0.56% climb in the extended session, the preceding drops remain evident in the fact that NVDA shares are up a mere 2.02% in the weekly chart.
Picks for you
Though Nvidia stock has, so far, managed to keep its price above the psychologically important threshold, it may, nonetheless, face a major downturn later this year.
The Nvidia stock bear case for 2025
Rather than being based on any severe deficiency in the semiconductor giant, the NVDA stock bear case for 2025 hinges on a series of equity factors, business hiccups, and rising competition from a rather unexpected locale: the People’s Republic of China.
Despite recording both impressive and impressively growing revenue, Nvidia’s valuation can be called into question once juxtaposed with its biggest peers – Advanced Micro Devices (NASDAQ: AMD) and Intel (NASDAQ: INTC).
In the latest reported quarter, Nvidia revealed a revenue of $39.33 billion – approximately two and a half times greater than Intel’s $14.26 and five and a half times greater than AMD’s $7.66 billion.
Though such figures position the company as the unquestionable industry leader, they fall short of justifying a press-time valuation of $2.8 trillion – seventeen times bigger than AMD’s $163 billion or thirty-one times bigger than Intel’s $89.54 billion.
So far, Nvidia has been driven by the significant hype surrounding its products and its role as the proverbial ‘shovel-seller’ of the artificial intelligence (AI) gold rush.
In 2025, both narratives may have been damaged.
Nvidia’s trouble on the Blackwell assembly line
To begin with, Nvidia’s new Blackwell – generally seen as the great catalyst of the company’s continued growth and an important accelerator for the AI industry – has been marred by issues.
Already in the summer of 2024, an issue affecting the infrastructure’s yield appeared. By the final weeks of the year, chip rack problems were delaying deliveries for some of Nvidia’s biggest clients.
Finally, as recently as early March 2025, additional problems affecting approximately 0.5% of the semiconductor giant’s new RTX 5090 and RTX 5070 Ti GPUs have been reported.
While it is worth pointing out that the issues unveiled by press time have either been reported as fixed or as not affecting the flagship series, even small issues can accumulate to generate strong headwinds.
Such a scenario is particularly likely with companies whose valuation is more based on perception than fundamentals.
Chinese competition pressures Nvidia…and the entire Silicon Valley
Elsewhere, 2025 already featured an unexpected stiffening of competition in the technology sector with the release of DeepSeek’s R1 model generating the first scare that NVDA stock would plunge below $100 and leading some pundits to speculate on an extinction event for venture capitalists.
Additionally, Chinese companies did not stop with the AI model and have, in more recent weeks, unveiled the first highly advanced AI agent – Manus – immediately sparking a surge in public interest in Asia, and have reportedly developed a new ‘quantum supercomputer,’ reportedly one million times faster than any Western counterpart.
Beyond the factors directly tied to Nvidia or the wider technology sector, macroeconomic instability presents other concerns.
Could Nvidia be a casualty of President Trump’s trade war?
President Donald Trump’s escalating trade war created an air of uncertainty and fear among consumers and traders while damaging relations with key allies and partners, including Taiwan, the biggest semiconductor manufacturer in the world.
Still, it is important to note that current tensions do not guarantee a collapse. Many of the targeted nations and entities have a profound self-interest in doing business with the U.S., and some companies – such as the Taiwan Semiconductor Manufacturing Company (NYSE: TSM) – have already announced massive investments in their on-shore production capacity.
Would a 50% drop lead Nvidia to a fair valuation?
Clearly, none of the listed factors invalidates Nvidia’s strength or successes, but it negates the narrative of being the only and the biggest game in town, meaning a plunge closer to what the firm’s fundamentals would suggest is likely.
Considering the discrepancy between Nvidia and its biggest Western competitors, a valuation directly proportional to revenue – under the assumption AMD is fairly valued – would mean NVDA shares could plunge as much as 68.23% to $896 billion. However, a collapse greater than 50% appears unlikely even under dire circumstances.
