Put simply, if you’re expecting Nvidia to bounce back within a matter of months, don’t hold your breath. In turn, affecting Nvidia’s growth, and delaying a possible re-acceleration of growth. This may result in “doom and gloom” predictions of a severe recession ahead panning out. If high inflation persists, the Fed may be forced to raise rates further. On the other hand, it may take more than a year for the situation to improve. Assuming the Fed’s rate hikes achieve their intended goal (lower inflation), enabling the central bank to resume lowering rates, before they have a severe impact on employment and economic growth. This “when” may arrive within a year’s time. When it comes to a NVDA comeback, it’s more a matter of “when” than “if.” Given its leading position in the GPU market and exposure to secular trends like the rise of AI and cloud computing, the company will continue the deliver the results needed to justify a rebound for shares. It Could Take a Year (or Longer) for Nvidia to Recover Still, outside small positives like this one, things stand to remain negative for the company, and for the stock, in the short term. It may also receive some indirect benefits from this large slug of federal largesse. While as a fabless chip company, Nvidia can’t benefit from manufacturing subsidies, it may qualify for some of the research and development (R&D) funding provided by this program.
Department of Commerce this month is now seeking applications for the subsidies authorized by last month’s CHIPS Act.
That’s not to say they haven’t been any bright spots.įor instance, the U.S. These apply to some of the high-end AI products it currently sells to end-users in China. One bit of news hurting shares lately has been the U.S. Concerns about the impact on operating performance by factors like a stronger dollar and a slowing global economy are also applying pressure to the sector overall.Īlso, as mentioned above, company-related news is also negatively affecting the performance of NVDA stock. Tech stocks overall remain under pressure, and not just due to the Fed’s plans to continue hiking rates to combat inflation.
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