Reminder: A stock doesn’t rise over time without encountering a few speed bumps along the way.
And that includes AI chipmaker Nvidia (NVDA).
Nvidia stock tanked 7.6% in the first quarter, underperforming the S&P 500 (^GSPC), Dow Jones Industrial Average (^DJI), and Nasdaq Composite (^IXIC).
Shares ended the first quarter under the psychologically important 200-day moving average — a level Nvidia fell below in mid-March.
In 2025, Nvidia’s stock rose by about 38.9%, more than double the S&P 500’s gain of 16.4%.
If there is any saving grace, it’s that Nvidia wasn’t the worst first quarter performer of the “Magnificent Seven.” That honor goes to Elon Musk’s Tesla (TSLA) — its stock plunged 24%.
Despite a solid GTC 2026 conference in early March, where CEO Jensen Huang revealed a $1 trillion revenue pipeline through 2027, Nvidia stock has been hit by a “sell the news” reaction from investors who are questioning how much growth is already baked into its premium valuation.
The company faces other headwinds as well. While Nvidia dominates the AI “training” chip market, there is growing uncertainty about how quickly it can monetize the shift to AI inference (running models in production).
Analysts are waiting for tangible proof that Blackwell Ultra shipments will translate into immediate earnings beats and that the recent Grok acquisition makes strategic sense.
“Nvidia … continues to ramp Blackwell production (GB200+GB300) while simultaneously preparing for the imminent ramp of its Vera Rubin platform (on track for the second half of 2026),” JPMorgan analyst Harlan Sur wrote in a note. “Even so, the stock response [post-earnings] suggests investors were left wanting more, which we think is tied to continued uncertainty around the growth trajectory for Nvidia’s data center business in 2027.”
Meanwhile, the ongoing volatility from Operation Epic Fury has sparked a massive rotation out of high-beta tech stocks like Microsoft (MSFT) and Meta (META) and into “physical” safe havens like energy and defense.
“We ask our individual investors every time we survey them, one of the biggest stocks in your portfolio, it’s the Mag 7, it’s the FAANG stocks and the stocks that have taken so much punishment over the last six months or so. And they still hold onto them … These are the stocks that have been loyal to, and we’ll see how long they’re willing to keep up that patience,” Investopedia editor in chief Caleb Silver said on Yahoo Finance’s Opening Bid (video above).