Nvidia's 15% Drop: A Blip or a Trend? Analysts Predict a Rebound

Nvidia's stock price took a 15% tumble recently, but analysts are predicting a rebound for the tech giant. The company's strong financial performance and growing demand for AI infrastructure have investors optimistic about its future prospects. Here's a closer look at the factors driving Nvidia's recent drop and the reasons analysts believe the stock is poised for a rebound.

Nvidia's Recent Drop

Nvidia's stock price fell by 15% recently, primarily due to market sentiment and sector rotation. Investors have been rotating out of growth stocks like nvidia and into more defensive positions, leading to a sell-off in the stock. Additionally, geopolitical tensions, particularly between the U.S. and China, have raised concerns about the potential impact on Nvidia's supply chain and revenue. The company's earnings report, although topping analyst estimates, may have fallen short of investor expectations, leading to a sell-off in the stock. Lastly, Nvidia's high valuation relative to its peers and the broader market has made the stock more susceptible to sell-offs during market downturns.



Analysts Predict a Rebound

Despite the recent drop, analysts are optimistic about Nvidia's long-term prospects. The company's strong financial performance, growing demand for AI infrastructure, and positive analyst ratings indicate that Nvidia is well-positioned for future growth. Here are some specific points supporting analysts' predictions for a rebound:

1. Strong Financial Performance: Nvidia reported revenue of $39.3 billion for the fourth quarter of 2025, up 12% from the previous quarter and 78% from a year ago. GAAP earnings per share (EPS) was $0.89, up 14% from the previous quarter and 82% from a year ago. Non-GAAP EPS was $0.89, up 10% from the previous quarter and 71% from a year ago. These strong financial results indicate that the company is performing well and is likely to continue to do so in the future.
2. Growing Demand for AI Infrastructure: The demand for AI infrastructure, particularly Nvidia's GPUs, is increasing as more companies invest in AI technologies. This is evident in the growth of Nvidia's data center business, which accounted for 91% of the company's total sales in the fourth quarter of 2025, up from 83% a year ago and 60% in the same period of 2023. The company's data center revenue increased about tenfold over the past two years.
3. Analyst Ratings: The average analyst rating for Nvidia stock from 42 stock analysts is "Strong Buy," indicating that analysts believe this stock is likely to perform very well in the near future and significantly outperform the market.
4. Market Trends: The AI market is expected to grow at a CAGR of 33.1% from 2021 to 2028, reaching a value of $190.61 billion. This growth is driven by increasing adoption of AI technologies in various industries, which will likely lead to increased demand for Nvidia's GPUs.



In conclusion, Nvidia's recent 15% drop in stock price can be attributed to market sentiment, geopolitical tensions, earnings misses, and valuation concerns. However, as these factors change in the near future, Nvidia's stock price may rebound if the company can successfully navigate these challenges and maintain its strong growth prospects. Analysts' predictions for a rebound are supported by the company's strong financial performance, growing demand for AI infrastructure, positive analyst ratings, and favorable market trends. As the demand for AI technologies continues to grow, Nvidia's stock price is likely to benefit from this trend, driving up its value in the long run.