Nvidia Stock Down 7% in Past Month: Should You Buy the Dip?

Nvidia (NVDA) shares declined 2.7% after Broadcom (AVGO) reported custom chips (XPUs) gaining traction among hyperscalers, including a $10 billion commitment from OpenAI. Despite recent declines, NVDA remains a lucrative investment in 2025, up 96% from its year-to-date low in April. Analysts, including Atif Malik at Citi, maintain a "Buy" rating on NVDA, citing potential upside from China and robust AI spending. The consensus rating on NVDA remains at "Strong Buy" with a mean target of $212, indicating potential upside of over 25% from current levels.

NVIDIA (NVDA) shares experienced a 2.7% decline on September 9, 2025, following Broadcom (AVGO) reporting that custom chips (XPUs) are gaining traction among hyperscalers, including a significant $10 billion commitment from OpenAI. Despite this setback, NVDA remains a lucrative investment in 2025, having surged 96% from its year-to-date low in April. Analysts, such as Atif Malik at Citi, maintain a "Buy" rating on NVDA, citing potential upside from China and robust AI spending. The consensus rating on NVDA remains at "Strong Buy" with a mean target of $212, indicating potential upside of over 25% from current levels NVIDIA's Unyielding Grip: How Blackwell and Rubin CPX Propel a Trillion-Dollar AI Empire^[2].

Broadcom's recent developments underscore its growing influence in the AI semiconductor market. The company has secured a $10 billion custom ASIC contract from a major non-CSP client, with Apple and xAI also in line for new chips. This deal positions Broadcom as a strong competitor to NVIDIA, which has long dominated the AI chip market Broadcom secures $10 billion ASIC contract, with Apple and xAI next in line for new AI chips^[1]. OpenAI's custom AI chip, produced with Broadcom and TSMC, aims to reduce NVIDIA dependence by 2026, further challenging NVIDIA's market dominance.

NVIDIA, however, continues to innovate and solidify its leadership in the AI chip market. The recent unveiling of its next-generation GPU architectures, Blackwell and Rubin CPX, underscores its technological leadership. These innovations are the bedrock upon which NVIDIA's unprecedented trillion-dollar market capitalization has been built and expanded. The introduction of these cutting-edge chips ensures NVIDIA remains at the forefront of powering sophisticated AI applications, further entrenching its comprehensive hardware and software ecosystem NVIDIA's Unyielding Grip: How Blackwell and Rubin CPX Propel a Trillion-Dollar AI Empire^[2].

The AI chip market is highly competitive, with numerous players vying for market share. Advanced Micro Devices (AMD) and Intel (INTC) are among the traditional GPU competitors, while major cloud providers like Google, Amazon, and Microsoft are increasingly developing their own custom AI chips. These developments aim to reduce costs, improve efficiency, and gain independence from NVIDIA's vendor lock-in. Despite these challenges, NVIDIA's dominance in the AI chip market remains unparalleled, with estimates ranging from 70% to 95% in AI accelerators NVIDIA's Unyielding Grip: How Blackwell and Rubin CPX Propel a Trillion-Dollar AI Empire^[2].

In conclusion, while Broadcom's recent developments pose a challenge to NVIDIA's market dominance, NVIDIA's technological leadership and robust financial performance continue to position it as a strong investment in the AI chip market. The AI chip market is highly dynamic and competitive, with numerous players vying for market share. Investors should closely monitor these developments and consider the potential impact on their investment portfolios.

References:
Broadcom secures $10 billion ASIC contract, with Apple and xAI next in line for new AI chips^[1] https://www.tweaktown.com/news/107627/broadcom-secures-dollars10-billion-asic-contract-with-apple-and-xai-next-in-line-for-new-ai-chips/index.html
NVIDIA's Unyielding Grip: How Blackwell and Rubin CPX Propel a Trillion-Dollar AI Empire^[2] https://markets.financialcontent.com/wral/article/marketminute-2025-9-9-nvidias-unyielding-grip-how-blackwell-and-rubin-cpx-propel-a-trillion-dollar-ai-empire