Nvidia Stock Is Pulling Back Today. Here's Why Investors Are Nervous.

Source Motley_fool

Something is spooking Nvidia (NASDAQ: NVDA) investors today. Shares dropped almost 5% in early trading and were still lower by 2.7% as of 1:10 p.m. ET.

It's actually more than one thing putting pressure on Nvidia shares. First, investors got a business update from server manufacturer Super Micro Computer last night, where the artificial intelligence (AI) player slashed its guidance. Then one Wall Street analyst piled on the fear with a "sell" recommendation on Nvidia. That was based on some of the same concerns impacting Super Micro's business.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Data center spending is the billion-dollar question

Super Micro preannounced its fiscal 2025 third-quarter results for the period ended March 31. It cut its quarterly revenue estimate by nearly $1 billion to about $4.55 billion. The maker of AI servers and cooling systems said some customers delayed investment decisions and expects those sales to move to the current quarter.

Investors are wondering if some of those delays might speak more to an environment where big AI cloud infrastructure companies are cutting back on data center investments. If so, that could hit Nvidia sales in a big way.

Nvidia shares have been under pressure all year, partly from uncertainty and concerns for slowing sales growth. It will be almost another month before investors hear directly from Nvidia, since it reports quarterly results on May 28. One Wall Street analyst doesn't think investors should wait for that.

Seaport Research analyst Jay Goldberg put a $100 price target on Nvidia shares today, representing a 5% drop from recent levels. The analyst feels that gains from AI spending are already priced into Nvidia shares, and that growing questions surrounding future spending on AI infrastructure also will pressure the stock. He believes investors should sell shares now.

I believe long-term investors should hold Nvidia stock. Super Micro's problems could be internal or due to rising competition in its niche market. Even if data center spending is slowing, Nvidia can easily withstand a slowdown in the short term. Therefore, the stock remains a buy-and-hold name, in my view.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

  • Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $282,717!*
  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $40,044!*
  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $607,048!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.

See the 3 stocks »

*Stock Advisor returns as of April 28, 2025

Howard Smith has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Dogecoin (DOGE) Struggles to Sustain Gain as Meme Coin Mania Cools OffDogecoin started a fresh increase and climbed above the $0.2320 zone against the US Dollar. DOGE is now correcting gains and approaching $0.2180. DOGE price started a fresh increase above the $0.220
Author  NewsBTC
5 Month 19 Day Mon
Dogecoin started a fresh increase and climbed above the $0.2320 zone against the US Dollar. DOGE is now correcting gains and approaching $0.2180. DOGE price started a fresh increase above the $0.220
placeholder
EUR/USD Price Forecast: Seems vulnerable below 1.1200, 200-period SMA on H4 holds the keyThe EUR/USD pair ticks higher at the start of a new week amid a softer US Dollar (USD), though it lacks bullish conviction and remains below the 1.1200 round figure through the Asian session.
Author  FXStreet
5 Month 19 Day Mon
The EUR/USD pair ticks higher at the start of a new week amid a softer US Dollar (USD), though it lacks bullish conviction and remains below the 1.1200 round figure through the Asian session.
placeholder
Crypto market rebounds as Trump hints at Russia-Ukraine ceasefire, risk sentiment improvesUS President Donald Trump's statement on a possible Russia-Ukraine ceasefire on Monday sparked optimism across global markets. The news of easing geopolitical tensions lifted investor confidence, driving a mild recovery in major cryptocurrencies.
Author  FXStreet
21 hours ago
US President Donald Trump's statement on a possible Russia-Ukraine ceasefire on Monday sparked optimism across global markets. The news of easing geopolitical tensions lifted investor confidence, driving a mild recovery in major cryptocurrencies.
placeholder
EUR/USD Price Forecast: Tests descending channel’s upper boundary near 1.1250EUR/USD remains steady after registering more than 0.50% gains in the previous session, trading around 1.1240 during the Asian hours on Tuesday. On the daily chart, technical analysis indicates a bearish bias is in play, as the pair continues to trade lower within a descending channel pattern.
Author  FXStreet
21 hours ago
EUR/USD remains steady after registering more than 0.50% gains in the previous session, trading around 1.1240 during the Asian hours on Tuesday. On the daily chart, technical analysis indicates a bearish bias is in play, as the pair continues to trade lower within a descending channel pattern.
placeholder
Solana (SOL) Holds Ground in Tight Range — Traders Watch for Directional CueSolana started a fresh increase from the $160 zone. SOL price is now consolidating gains and might aim for more gains above the $172 zone. SOL price started a fresh increase above the $165 level
Author  NewsBTC
21 hours ago
Solana started a fresh increase from the $160 zone. SOL price is now consolidating gains and might aim for more gains above the $172 zone. SOL price started a fresh increase above the $165 level
goTop
quote