Nvidia Stock Drops 4.27% Amid Pricing Power Concerns

On April 4, 2025, Nvidia's stock dropped 4.27% in pre-market trading, reflecting investor concerns and market dynamics.

Investor sentiment towards Nvidia has been dampened by recent reports from HSBC, which suggest that the company is losing its pricing power in the GPU market. The bank has downgraded Nvidia's stock rating from "buy" to "hold" and reduced its price target from $175 to $120. This shift is attributed to the diminishing demand for AI GPUs and the lack of significant price increases between the B200 and B300 Blackwell AI GPUs.

HSBC's analysis indicates that the average selling price (ASP) of Nvidia's GPUs has not shown substantial growth, which has raised doubts about the company's ability to maintain its premium pricing strategy. This, coupled with the recent DeepSeek sell-off event, has led to a significant drop in Nvidia's market value, with investors questioning the sustained high demand for GPUs.

Nvidia's CEO, Jensen Huang, has defended the company's GPU pricing, citing the high manufacturing complexity and the efficiency gains that users can achieve. However, the market's response to these assurances has been lukewarm, with the stock continuing to underperform in 2025. The company is also facing regulatory challenges, as the latest round of tariffs imposed by the Trump administration has added to the uncertainty surrounding its operations.