Nvidia Stock Price Hits Roadblock Amid AI Demand Worries
Nvidia's stock price has been stagnant in recent weeks, despite strong performance from other major tech companies. As of August 3, shares closed at $206.64, a 2.93% increase but still about 13% off its all-time high of $236.54.
The company's year-to-date gain is around 10.75%, trailing behind Amazon's 23% rise and Google's 19.41%. Nvidia's relative performance among the 'Magnificent Seven' has fallen behind, with Apple at 11.52% and Microsoft at 0.80%.
The recent drop in stock price can be attributed to market concerns over 'circular financing', where funds flow from Nvidia to its customers and ultimately return to Nvidia's books as revenue. This closed-loop structure has sparked worries about AI demand authenticity and credit risk transmission.
However, institutional analysts remain optimistic about Nvidia's growth prospects. Melius Research predicts a price of $400, while BofA forecasts a total addressable market (TAM) for AI data center systems revised upward to $1.7 trillion.