Nvidia (NVDA) Stock Trades Down, Here Is Why

What Happened?

Shares of leading designer of graphics chips Nvidia (NASDAQ:NVDA) fell 2.9% in the afternoon session after rival Broadcom confirmed a significant partnership with OpenAI, fueling concerns about intensifying competition in the artificial intelligence hardware market. 

Broadcom announced a $10 billion custom chip deal with OpenAI, a move that highlights a broader trend of major tech companies developing their own processors to cut costs and fine-tune AI performance. This strategy is also being pursued by Alphabet, Amazon, and Meta Platforms. The development prompted analysts at HSBC to caution that the custom silicon market could expand faster than Nvidia's general-purpose GPU business by 2026.

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What Is The Market Telling Us

Nvidia’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 7 days ago when the stock dropped 3.3% as investors continued to lock in some profits, with the stock falling as its latest earnings report failed to meet the market's highest expectations. The decline extends from the previous session, as investors reacted to a quarterly report that, while strong, showed signs of slowing momentum. 

Although Nvidia beat overall Q2 earnings and revenue forecasts, a slight miss in data center revenue and a Q3 forecast that was only in line with consensus estimates disappointed those hoping for a larger beat. Markets often punish even slight deceleration in growth for highly valued companies. Adding to the pressure, a weak forecast from peer chipmaker Marvell Technology soured sentiment across the semiconductor sector.

Nvidia is up 20.8% since the beginning of the year, and at $167.10 per share, it is trading close to its 52-week high of $183.16 from August 2025. Investors who bought $1,000 worth of Nvidia’s shares 5 years ago would now be looking at an investment worth $14,025.

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