Nvidia (NASDAQ: NVDA) was one of the best-performing stocks of 2024. However, it has had a rough start in 2025.
The crux of the present issues plaguing Nvidia stock arose in late January. Valuation concerns have been present for quite a while now — but another piece of the puzzle is the widespread worries that investors have had over the large capital expenditures that other tech companies — in other words, Nvidia’s customers, planned to make.
To be more precise, in late January, those anxieties were compounded by the release and subsequent success of Chinese artificial intelligence (AI) model DeepSeek, which reportedly cost developers a fraction of what is usually required in terms of funds to develop. Worse still, DeepSeek allegedly managed to release a competitive product without using Nvidia’s latest line of chips.
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At press time, NVDA stock was changing hands for $119.10 — prices have declined by 11.32% on a year-to-date (YTD) basis.
This stark selloff raises the question of whether or not one of the stock market’s biggest success stories in recent years still remains a safe bet.
Analysts remain bullish on Nvidia stock
Following the initial crash seen on January 27, support and resistance flipped as the price of Nvidia shares dipped below $120. Shortly after, on February 1, President Donald Trump placed an additional 10% tariff on China. The move, highly criticized by economists, could augur the start of a wider trade war.
With that being said, the tariffs likely won’t have a major impact on the price action of NVDA stock in the near term. While the cost of importing data processing equipment is set to rise — which could easily translate to weaker demand, it’s worth noting that this will most likely be a small dent for a company whose flagship product is already sold out for the next 12 months.
Despite everything that is going on, Nvidia stock has also received its highest-ever price target. Both Rosenblatt Securities and Tigress Capital have set a $220 price forecast for the stock in the next 12 months. If met, this ambitious mark would equate to a 84.71% increase from current prices.
Although slightly less optimistic, Vivek Arya of Bank of America (NYSE: BAC) reiterated a prior ‘Buy’ rating with a $190 price target. While the BofA analyst did note that tariffs would likely impact the chipmaker’s margins in Q1, he still expects to see an earnings beat as well as strong data center demand going forward.
Ultimately, Nvidia is still the leader in a dynamic space buoyed by healthy demand from a variety of high-growth industries.
The competition is extremely unlikely to catch up to the Jensen Huang-led venture — barring a situation in which all of the AI hype turns out to have been a bubble, Nvidia stock is set to remain an attractive opportunity for the long term — one which is now trading at a significant discount. Investors should keep an eye out for the company’s next earnings call, due February 26.
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