Nvidia’s 2025 Nosedive: Chip Giant Bleeds 20% as AI Hype Cools

Wall Street’s favorite AI darling stumbles—shares crater as reality bites.

Tech investors scramble after Nvidia’s brutal Q1 wipeout. The once-unstoppable GPU juggernaut now faces its steepest decline since the crypto-mining bust.

Behind the plunge: data center spending slows, inventory piles up, and those ’game-changing’ AI margins start looking suspiciously human. Analysts whisper about ’valuation recalibration’ (translation: the smart money already left).

Silver lining? Shorts are having a field day, and retail bagholders get another masterclass in ’buy high, sell low’—just how Wall Street likes it.

In 2023 and 2024, Nvidia (NVDA) shot up the stock market charts and outperformed most other tech stocks, but it has had an abysmal 2025 so far, losing about 20% of its value.

A number of factors have worked against Nvidia in 2025 to bring its stock price down from $144 in January to its current value of $106. While the stock price for this tech company may be up 0.27% today, it has declined sharply through the first few months of the year.

Nvidia has suffered primarily this year due to selling restrictions placed on it by the United States government. Many of Nvidia’s most powerful AI chips are not allowed to be sold to China, as the United States is trying to prevent the competing nation from surpassing it in this tech niche. However, China is a massive market for Nvidia, and the company has been selling less powerful chips there as a way around the current restrictions.

Because U.S. law keeps Nvidia from being as competitive as it could be in that market of more than one billion people, there is room for other tech companies to step in and pull Nvidia’s market share away from them. That is exactly what looks to be happening as Chinese tech company Huawei is preparing to launch the Ascend 920 chip that will compete directly with Nvidia’s H20 chip that is currently being sold in China. This news has caused Nvidia’s stock price to plummet recently.

Nvidia has also been hurt by the steep fines they are paying to bring some for their chips to the Chinese market, but they are committed to meeting market demands there despite the high costs to them. Nvidia has been hurt by recent tariffs as well, and the company was recently the subject of a Chinese government inquiry into monopolistic business practices.

Nvidia could benefit from the pause placed on tariffs over the next three months, giving it some room to breathe and get back on its feet. There is still the issue of the Chinese market potentially going in large part to a competitor. That would be a major loss for Nvidia.

Nvidia reported that for 2024 it made $17.1 billion in revenue from the Chinese and Hong Kong markets. That accounts for about 13% of its overall revenue, so losing that market would be catastrophic at a time when the company is already struggling.

It does not look like Nvidia will be pulling out of the decline anytime soon, though, since premarket trading for Wednesday has its stock price dropping 3.57% already. Investors should prepare for more rough patches in 2025 as Nvidia weathers tariffs, stiff competition, and rising costs.