NVIDIA (NVDA) Shares Plunge 3.60% as Macro, China Concerns Weigh on AI Optimism

NVIDIA (NASDAQ: NVDA) shares fell 3.60% in pre-market trading on November 7, 2025, signaling renewed investor caution amid ongoing macroeconomic uncertainties and sector-specific challenges.

The decline reflects broader concerns about the company’s exposure to China-related risks, including restricted access to the country’s AI innovation ecosystem. While NVIDIA maintains an 80% dominance in AI accelerators via its H100/H200 GPUs and CUDA platform, analysts highlight potential vulnerabilities if competitors gain traction or demand for high-margin AI chips slows. The stock’s recent all-time highs—capped at a $5 trillion market valuation—now face pressure as speculative optimism about AI’s long-term growth wanes.

Key fundamentals remain robust: data center revenue surged to $35.6 billion in Q4 2024, driven by exponential AI workload growth. However, maintaining 73% gross margins amid rising competition and energy efficiency demands poses a critical test. Market sentiment hinges on whether NVIDIA can sustain its leadership in GPU innovation and software moats like CUDA. A slowdown in AI development or reduced hyperscaler spending could erode margins and trigger a re-rating.

Backtest assumptions suggest divergent outcomes by 2030. In a bullish scenario, sustained AI growth and Blackwell GPU adoption could push the stock to $491 per share, assuming 25% CAGR in data center revenue and 70%+ margins. A base case of $265 projects 15% CAGR and 60%-65% market share retention. The bear case, however, warns of a $38 price if AI adoption falters, reducing NVIDIA to a gaming GPU provider with diminished growth premiums. These scenarios underscore the stock’s reliance on the AI narrative’s trajectory.