It feels weird to say it. For three years, Nvidia was the stock that only knew how to go up. You woke up, checked your phone, and Jensen Huang had added another few billion to the market cap. But lately, the vibe has shifted. If you've noticed Nvidia stock going down while the rest of the S&P 500 seems to be chugging along, you aren't imagining things.
The "invincibility" phase is over.
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Honestly, the drop we saw this week—falling about 1.4% on Wednesday and sputtering through much of early January 2026—isn't just a random blip. It's a mix of geopolitical headaches, big-money investors moving their chips to different tables, and a very real concern that we’ve reached "peak AI" spending.
The China Problem and the H200 Export Twist
The most recent trigger for the slide was actually a bit of a "good news, bad news" situation. On January 14, 2026, the Trump administration technically gave Nvidia the green light to export its H200 AI chips to China. On paper? Great. More customers. In reality? The market hated the "security requirements" attached to the deal.
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Investors hate fine print.
When the government says you can sell your best tech to your biggest rival but only if you meet a laundry list of evolving security hurdles, it creates uncertainty. And if there is one thing Wall Street vomits at, it’s a murky future. We already saw Nvidia take a massive $4.5 billion hit earlier in the fiscal year because of excess inventory from the old H20 chips that they couldn't ship. Seeing new friction on the H200 line makes people nervous that another multi-billion dollar write-down is lurking in the shadows.
Is the "AI Supercycle" Losing Steam?
There is a growing camp of experts, including folks like billionaire Peter Thiel, who seem to think the hardware gold rush is cooling off. Thiel recently made headlines by pivoting away from Nvidia in favor of companies like Microsoft and Apple.
The logic is pretty simple: we’ve spent the last three years buying the shovels. Now, everyone wants to see if anyone is actually finding any gold.
- Custom Silicon: Google, Amazon, and Meta are Nvidia's best customers. They are also its scariest competitors. They’re all building their own internal AI chips (ASICs) to save money.
- The "Law of Large Numbers": Nvidia’s revenue grew 62% last quarter to $57 billion. That’s insane. But you can't grow 60% every year forever when you're already a $5 trillion company. There literally isn't enough money in the global economy to keep that pace.
- The Blackwell Delay: The highly anticipated Blackwell chips took a bit longer to ramp up than some expected. While CEO Jensen Huang says demand is "skyrocketing," the delay gave competitors like AMD a window to sneak in and grab a few contracts with OpenAI and Oracle.
Valuation vs. Reality
Nvidia is currently trading at about 23 to 25 times forward earnings. Kinda cheap, right? Compared to where it was, yeah. But the reason Nvidia stock going down persists is that the "whisper numbers" are getting harder to hit.
When a stock is priced for perfection, even a "good" earnings report can cause a sell-off if it isn't "miraculous."
We’re seeing a shift from "momentum" to "value." Some analysts, like those at Wolfe Research, think the stock is actually an "AI laggard" right now. They argue the market is being too harsh. They see $40 billion in potential revenue upside that the average investor is ignoring. But until we see the next quarterly report on February 25, the bears are the ones controlling the microphone.
What to Watch for Next
If you're holding or looking to buy, keep your eyes on the TSMC earnings. Nvidia doesn't actually make its own chips; Taiwan Semiconductor does. TSMC just reported a 35% jump in net income, which actually helped Nvidia rebound about 3% this Thursday morning. It’s a seesaw. One day it's export bans, the next it's record-breaking manufacturing data.
Actionable Steps for Investors
Stop watching the daily candle. It’ll drive you crazy. Instead, focus on these specific markers to see if the slide is a correction or a crash:
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- Check the Hyperscaler CapEx: When Microsoft and Amazon report their earnings, ignore their software sales for a second. Look at their Capital Expenditure. If they are still spending billions on data centers, Nvidia is fine. If that number flattens, run.
- The "Rubin" Roadmap: Nvidia is already talking about its next-gen Rubin chips. If they can stay six months ahead of the competition, they keep their pricing power. If AMD's data center revenue jumps more than 60% this year, Nvidia's "moat" is leaking.
- Sovereign AI: Watch for deals with national governments. Countries are now building their own domestic AI clusters for national security. This is a "new" market that doesn't depend on Silicon Valley's hype cycle.
The bottom line? Nvidia isn't "dying." It's maturing. It’s moving from a high-growth startup phase into the "foundational utility" phase of the intelligence age. That transition is always messy, and it usually involves the stock price taking a few hits along the way.