NVIDIA and Chevron Drag Dow Down: What's Next for Tech and Energy Stocks?

The Dow Jones Industrial Average (DJIA) took a significant hit on Monday, with NVIDIA Corp. (NVDA) and Chevron (CVX) leading the decline. The DJIA fell by 350 points, or 0.8%, as shares of NVIDIA and Chevron contributed to the index's intraday decline. This article explores the recent stock price movements of NVIDIA and Chevron, their impact on the broader market, and the potential implications for tech and energy stocks.



NVIDIA's recent stock price movements can be attributed to a combination of market sentiment, geopolitical concerns, and the company's earnings report. Despite strong earnings, the market reacted negatively due to margin compression and high total cost of ownership (TCO) for inference GPUs. Additionally, the market is influenced by geopolitical concerns, such as the potential impact of tariffs on the company's operations. Chevron's stock price decline can be attributed to broader market sentiment and economic indicators, such as in-line inflation data and geopolitical concerns. The company's earnings and dividend increases did not offset the negative market sentiment, leading to a decline in its stock price.



The recent stock price movements of NVIDIA and Chevron reflect the broader market sentiment and economic indicators, such as inflation data, geopolitical concerns, and market reactions to earnings reports. The negative returns for both companies contributed to the decline of the Dow Jones Industrial Average.

Primary factors driving the performance of NVIDIA and Chevron:

1. NVIDIA:
- AI and Data Center Demand: NVIDIA's strong performance is driven by the increasing demand for AI and data center solutions. The company's data center revenue rose 142% in 2024, and it announced partnerships with major cloud service providers and industry leaders to advance AI, genomics, and drug discovery.
- AI Enterprise and Software: NVIDIA's AI Enterprise and other software solutions have contributed to its growth. The company launched NVIDIA AI Blueprints and Llama Nemotron model, further expanding its software offerings.
- Automotive and Robotics: NVIDIA's automotive development agreements and robotics platforms, such as Jetson, have also contributed to its performance.

2. Chevron:
- Energy Production and Returns: Chevron's performance is driven by its ability to increase energy production and return cash to shareholders. In 2024, the company increased worldwide and U.S. production by 7% and 19% respectively, and returned a record $27 billion cash to shareholders.
- Dividend Growth: Chevron's dividend growth is an essential factor for long-term investors. The company announced a 5% increase in its quarterly dividend to $1.71 per share in 2024.
- Project Start-ups and Milestones: Chevron's success in delivering key project start-ups and milestones, both in the U.S. and Kazakhstan, has contributed to its performance.

Long-term investment potential:

- NVIDIA: The growing demand for AI and data center solutions, along with NVIDIA's strong partnerships and software offerings, positions the company well for long-term growth. Its investments in automotive and robotics platforms also expand its market reach.
- Chevron: Chevron's ability to increase energy production, return cash to shareholders, and grow its dividend demonstrates its strong financial performance and commitment to shareholder value. The company's success in delivering key projects further enhances its long-term investment potential.

Comparing NVIDIA and Chevron with their respective industry peers:

- NVIDIA vs. Semiconductor Industry Peers:
- Revenue Growth: NVIDIA's revenue grew by 114% in 2024 compared to the previous year, while the semiconductor industry as a whole grew by an estimated 10% in the same period.
- Earnings Growth: NVIDIA's earnings increased by 144.89% in 2024, while the semiconductor industry's earnings grew by an estimated 15% in the same period.
- Analyst Ratings: NVIDIA has an average analyst rating of "Strong Buy," while the semiconductor industry has an average rating of "Buy."
- Price Targets: The average 12-month price target for NVIDIA is $171.24, which is a 47.53% increase from the current stock price. In comparison, the average price target for the semiconductor industry is a 25% increase from the current average stock price.

- Chevron vs. Energy Industry Peers:
- Revenue Growth: Chevron's revenue decreased by 3.36% in 2024 compared to the previous year, while the energy industry as a whole grew by an estimated 5% in the same period.
- Earnings Growth: Chevron's earnings increased by 6.91% in 2024, while the energy industry's earnings grew by an estimated 10% in the same period.
- Analyst Ratings: Chevron has an average analyst rating of "Buy," while the energy industry has an average rating of "Hold."
- Price Targets: The average 12-month price target for Chevron is $174.43, which is a 13.36% increase from the current stock price. In comparison, the average price target for the energy industry is a 10% increase from the current average stock price.

Insights from these comparisons:

- NVIDIA's strong revenue and earnings growth, as well as its positive analyst ratings and price targets, indicate that it is outperforming its semiconductor industry peers. This can be attributed to its leadership in AI and data center technologies.
- Chevron's revenue decline and relatively low earnings growth, along with its analyst ratings and price targets, suggest that it is underperforming its energy industry peers. This could be due to the challenging macroeconomic environment and increased competition in the energy sector.
- Both companies have significant potential for growth, with NVIDIA's strong position in AI and data center technologies and Chevron's vast energy reserves and global presence. However, their recent performance and analyst expectations differ significantly, highlighting the importance of sector-specific analysis and investment decisions.

In conclusion, the recent stock price movements of NVIDIA and Chevron reflect the broader market sentiment and economic indicators, such as inflation data, geopolitical concerns, and market reactions to earnings reports. The negative returns for both companies contributed to the decline of the Dow Jones Industrial Average. The primary factors driving the performance of NVIDIA and Chevron are AI and data center demand, energy production and returns, and their respective industry peers' performance. Long-term investment potential is strong for both companies, with NVIDIA's leadership in AI and data center technologies and Chevron's ability to increase energy production and return cash to shareholders. However, their recent performance and analyst expectations differ significantly, emphasizing the importance of sector-specific analysis and investment decisions.