Nvidia cools down as investors expect growth slowdown
The AI chip giant's stock has slid roughly 10% from its all-time high as supply constraints and shifting sentiment weigh on the sector's biggest winner
Nvidia, the company that became synonymous with the AI gold rush, is having a moment of quiet reckoning. Shares have pulled back to around $210-212, down from a record close of $235.47 set on May 14, representing a decline of roughly 10% from the peak.
The sell-off accelerated in mid-September, with shares dropping approximately 2.7-3.6% over a two-day stretch between September 14-15. Competitors like Broadcom and AMD have seen even steeper declines during the same window.
The numbers still look absurd, just less absurd
Nvidia’s most recent quarterly results were, by any normal standard, extraordinary. The company posted Q2 fiscal 2027 revenue of $96.2 billion, a 106% increase year-over-year. Its data center segment generated $89 billion of that total, surging 117% compared to the same period last year.
Nvidia projected Q3 revenue of approximately $108 billion, give or take 2%, and management signaled roughly 70% revenue growth for all of fiscal 2028.
Management also flagged that gross margins would likely stabilize in the 71-72% range by Q4.
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Supply constraints and a philosophical pivot
Memory components, critical for building the AI accelerators that hyperscalers are hoarding, remain constrained. Nvidia’s management went so far as to say that customer demand could double next year if those supply bottlenecks were resolved.
Calls from prominent AI figures, including OpenAI’s Sam Altman, to moderate the pace of frontier model development have introduced a new variable into the investment thesis. If the industry’s most visible builders are publicly pumping the brakes on how fast they scale, that naturally raises questions about whether hyperscaler capital expenditure can sustain its current trajectory.
Sector rotation tells its own story
Nvidia’s stock touched a low of around $190 in late June before recovering, a drawdown driven by investor rotation into memory and other semiconductor names.
What to watch from here
Upcoming earnings reports from major hyperscalers, the Microsofts, Amazons, and Googles of the world, will be the next major catalyst. If those companies signal any moderation in AI-related capital spending, Nvidia’s stock will likely face additional pressure regardless of its own execution.
Nvidia management’s claim that demand could double under better supply conditions is either a genuine preview of the next leg up or a carefully placed narrative cushion. Investors will find out which one over the next few quarters.