Nvidia Stock Slips Despite Massive Spending on AI. What’s Moving the Stock.

Nvidia chips are the favored choice for training artificial-intelligence models. (Courtesy NVIDIA)

Key Points

• Nvidia’s stock was down 0.8% in premarket trading, despite a 14% gain over the past five trading days.
• Nvidia is forecasting no Chinese revenue for the current quarter, implying a loss of $2 billion to $5 billion in potential sales.
• Microsoft, Meta Platforms, and Alphabet plan to increase capital expenditure, largely due to investments in AI data centers.

Nvidia was edging down Thursday after closing at a market valuation of more than $5 trillion the day before.

No announcement from the Trump-Xi summit on chip sales could be overshadowing huge spending on artificial-intelligence by major technology companies.

In midmorning trading, the stock was down 2.2% at $202.51. That would put only a small dent in 14% gains over the past five trading days, pushed by AI optimism.

Investors were hoping that President Donald Trump might give the stock another boost by announcing that Nvidia and other U.S. chip makers would be able to resume selling hardware to China after his meeting with Chinese leader Xi Jinping. However, Trump told reporters after the meeting that Nvidia’s Blackwell chips weren’t specifically discussed, according to multiple reports.

Trump said he told Xi that Beijing would have to negotiate with Nvidia directly but the U.S. was willing to be “the arbitrator or the referee”, according to Reuters.

Nvidia has been targeted by Chinese authorities, who have discouraged the use of its AI processors by domestic customers. Nvidia is currently forecasting no Chinese revenue for its current quarter, which implies a loss of between $2 billion and $5 billion in potential sales, according to the company’s executives.

Still, signs of U.S. spending are strong. Each of Microsoft, Meta Platforms and Google-parent Alphabet said in earnings reports on Wednesday that they will raise their capital expenditure, largely due to investment in AI data centers. That bodes well for future spending on semiconductors from Nvidia and its rivals.

Two other chip stocks were also down. Advanced Micro Devices was off 2.1% and Broadcom was falling 2.8%.

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