TLDRs:
- Nvidia stock rebounds after early dip, investors await Q4 earnings release.
- AMD-Meta deal intensifies competition in AI chip market, spurring volatility.
- Market eyes Nvidia guidance amid China sales and supply concerns.
- AI spending trends could dictate Nvidia’s momentum for upcoming quarters.
Nvidia Corp (NVDA.O) saw its stock rebound Tuesday, finishing roughly 0.7% higher at $192.96 following a morning decline to $187.40.
The recovery came as investors adjusted positions ahead of the company’s highly anticipated fiscal fourth-quarter earnings report, scheduled for after Wednesday’s market close. Trading volume approached 88.9 million units, highlighting heightened investor attention.
The early dip reflected caution over rising competition and the broader AI hardware landscape, particularly in the wake of a massive $60 billion chip supply deal between Advanced Micro Devices (AMD) and Meta Platforms. That agreement also grants Meta the option to acquire up to 10% of AMD, signaling a long-term commitment to diversifying its chip supply.
AMD-Meta Deal Shakes AI Chip Market
The AMD-Meta contract has sent ripples through the semiconductor sector, directly challenging Nvidia’s dominance in AI processing. AMD CEO Lisa Su described the deal as a “big bet,” while analysts note that Meta’s move could reshape demand dynamics for inference-focused chips, where trained AI models generate outputs in real time. Nvidia’s upcoming Vera Rubin processor is expected to compete directly with AMD’s MI450 chips in this segment.
Market reaction has been mixed, with Nvidia stock initially falling 0.7% to $190.19 on news of the deal but recovering later in the session. Traders are now focused less on immediate price movements and more on guidance, positioning themselves for the company’s earnings announcement.
Guidance and Supply Chain in Focus
Investors are closely watching Nvidia’s outlook for signs of sustainable AI-driven revenue growth. Wall Street expects a profit increase of more than 62% for the quarter ending January, alongside revenue growth of roughly 68% to $66.16 billion, according to LSEG data. Analysts emphasize the importance of Nvidia’s guidance on order fulfillment, factory output, and whether demand is shifting from training-heavy to inference-heavy workloads, which could affect pricing and chip selection across industries.
China remains a key variable in market sentiment. Conditional sales approval for Nvidia’s H200 AI chips means units have not yet reached Chinese customers, creating uncertainty over the company’s exposure to one of its largest potential markets.
Investors Brace for AI Spending Signals
As Nvidia prepares to release its fiscal Q4 numbers, investors are weighing whether AI spending will continue at current levels or slow amid cost-cutting measures by some customers. Market participants see AI investments as flexible, with orders potentially deferred, meaning Nvidia must demonstrate a solid backlog to maintain confidence.
The earnings report, expected between 4:20 and 4:30 p.m. Eastern Wednesday, will be followed by a conference call at 5 p.m., where management is expected to clarify the company’s outlook on supply, pricing, and global demand. Analysts and traders alike agree that Nvidia’s guidance could set the tone for broader sentiment in the AI chip market, influencing stock performance in the coming weeks.
Conclusion
Nvidia’s stock recovery Tuesday highlights cautious optimism as the market prepares for earnings. The company faces dual challenges: sustaining growth amid intensifying competition from AMD and securing demand across global markets, including China. The upcoming report will be pivotal in determining whether Nvidia can maintain momentum in the fast-evolving AI landscape.
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