Nvidia Stock Slips. Here Are Reasons to Believe the AI Trend Will Keep Going, Analysts Say.

Nvidia chips are the favored choice for training artificial-intelligence models. (Photo by Justin Sullivan/Getty Images)

Nvidia stock was slipping on Tuesday, but Wall Street remains confident in the artificial-intelligence trend ahead of tech earnings.

Nvidia shares were down 2.6% at $166.95 in morning trading, falling along with the wider market. The stock fell 0.6% on Monday.

Among other chip makers, Advanced Micro Devices was down 3.5% and Broadcom was falling 3.6%.

The key catalyst for Nvidia stock and AI processor companies more generally over the coming weeks is likely to be earnings reports from technology companies, kicking off with Google-parent Alphabet on Wednesday.

“We go into the earnings season expecting healthy results and encouraging guidance from tech, supporting our bullish long-term view on AI,” wrote Mark Haefele, chief investment officer of Global Wealth Management at UBS, in a research note. “Overall, we are expecting 12% profit growth from global tech in 2025 along with strong capital spending,”

Last week, Taiwan Semiconductor Manufacturing management said the AI secular growth trend continues to be strong and the company has not seen any changes in customer behavior for the second half of this year. TSMC is the primary semiconductor manufacturing partner for Nvidia.

On Tuesday, NewStreet Research analyst Pierre Ferragu said the top four AI chip makers—including Nvidia—will handily beat the current Wall Street sales consensus for revenue next year by 7%. “2026 is shaping up like 2025 did this time last year, with growth underestimated,” he wrote. “Demand appears to be outpacing purchase plans.”

Nvidia became the first company to ever close with a market capitalization over $4 trillion earlier this month and has since received the news it can resume selling artificial-intelligence chips to Chinese customers. However, U.S. companies remain its driving source of revenue.

ChatGPT-developer OpenAI said Tuesday that it had entered an agreement with software and cloud-computing company Oracle to develop more than five gigawatts of AI data center capacity in the U.S., containing more than two million chips. While it didn’t disclose what processors will be in the data centers, OpenAI relies heavily on Nvidia graphics-processing units for its AI technology.

“Today, the tailwind is squarely behind AI and tech infrastructure. Last quarter’s earnings season confirmed as much: results came in better than expected, and it was surprising how confidently companies guided higher despite all the uncertainty around trade policy and macro risks,” said Ken Mahoney, CEO at Mahoney Asset Management.

Write to Adam Clark at adam.clark@barrons.com