Nvidia (NVDA) shares rebounded on Friday, briefly pushing the tech giant back into the elite $3 trillion market cap club alongside Apple (AAPL). This comes after a sharp 8.5% drop on Thursday following its quarterly earnings report, which wiped out approximately $273 billion in value and brought the company’s market cap down to $2.94 trillion.
Volatility Amid Investor Concerns
Despite this week’s 8% slump, Nvidia remains the second most valuable U.S. tech company, behind Apple and ahead of Microsoft (MSFT), one of its largest customers. However, Nvidia shares have lost over 12% of their value in 2025 amid investor concerns about:
- Export controls and tariffs
- Competition from more efficient artificial intelligence models
- A slowing pace of growth in the semiconductor industry
Playground Global’s Sasha Ostojic expressed confidence in Nvidia’s fundamentals despite the recent sell-off, saying, “Any dips and spikes — especially short-term — are based on sentiment and perception, not necessarily on fundamentals.” He remains bullish on the stock’s long-term potential.
Strong Earnings Amid Market Turbulence
Nvidia reported better-than-expected quarterly results on Wednesday, with revenue jumping 78% year-over-year to $39.33 billion. The company’s data center revenue, which includes its market-leading graphics processors for AI workloads, soared 93% to nearly $36 billion.
Nvidia CEO Jensen Huang stated that demand for the company’s chips will remain strong as next-generation AI models, which require significantly more computing power, continue to evolve. “The amount of computation necessary to do that reasoning process is 100 times more than what we used to do,” Huang said in a recent interview.
Market Dynamics and Industry Competition
Nvidia’s growth heavily relies on billions of dollars of infrastructure spending from the world’s largest tech companies, including Microsoft, Google (GOOGL), and Amazon (AMZN). These cloud service providers accounted for about half of Nvidia’s data center revenue in the last quarter.
The stock’s recent volatility also comes amid broader market pressures facing the semiconductor industry. Shares of competitor Advanced Micro Devices (AMD) fell over 10% this week, reflecting investor concerns about its ability to compete with Nvidia in the data center space.
Looking Ahead: Nvidia’s Growth Prospects
Despite the challenges, Nvidia remains a tech powerhouse, worth five times more than it was at the start of the generative AI boom two years ago. It first hit the $3 trillion market cap milestone in June 2024.
Nvidia signaled confidence in a strong start to its fiscal 2026, highlighting that production issues for its next-generation chip, Blackwell, have mostly been resolved. Analysts and investors will be closely watching how Nvidia navigates geopolitical pressures and increasing competition in the AI chip market.
With its continued leadership in AI infrastructure and a solid revenue base from tech giants, Nvidia’s trajectory remains one of the most closely watched on Wall Street.
