Nvidia Stock: 30% Drop Fuels Recession Fears

The technology giant Nvidia has experienced a significant downturn in early 2025, with its stock plummeting 30% since January's record high. Currently trading around $104, the AI chip manufacturer's shares have fallen 23% year-to-date, marking a stark contrast to its impressive performance over the previous two years. This decline reflects a broader market weakness particularly affecting the technology sector, with the NASDAQ Composite dropping more than 10% during the same period. Despite Nvidia posting record quarterly numbers, investors have grown wary of the slowing growth momentum. The once-dominant AI hype has noticeably lost steam in recent weeks, directly impacting the chip manufacturer's valuation and dampening investor enthusiasm.

Economic Pressures Amplifying Market Anxiety

The current market environment is further intensifying pressure on technology stocks like Nvidia. Newly announced tariff measures set to take effect on April 2nd have heightened recession concerns, with Goldman Sachs raising the probability of a US recession from 20% to 35%. These planned tariffs, particularly on automobile imports and so-called "reciprocal tariffs" against numerous trading partners, could significantly disrupt the global supply chains crucial to the chip industry. Despite these challenges, some experts remain optimistic about Nvidia's prospects. Analysts at Rosenblatt Securities count Nvidia among four semiconductor stocks they predict could see price increases of up to 100%, offering a contrasting view to the current market sentiment that continues to favor defensive stocks over growth-oriented technology shares.

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Source StockWorld