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Nvidia is hosting its annual GPU Technology Conference, and kicked off the week with news of its next-generation chips, amping up analysts’ expectations of the company’s growth path. The event occurs amid a market environment that seems ready to question the sustainability of the chipmaker’s growth, as the big AI-powered tech stocks have fallen hard in recent weeks.
Nvidia CEO Jensen Huang presented the company’s new chips and hyped the data center industry’s build-out. Huang laid out the map: The company’s next AI chip out of the fab will be Blackwell Ultra, which debuts in the second half of this year. That will be followed up with Vera Rubin in the second half of 2026 and the Vera Rubin Ultra due to arrive in 2027’s second half.
Beyond that, Huang said he still sees robust growth for the company’s chips and expects the data center industry to grow to $1 trillion in spending. As the AI chip leader, Nvidia would capture a significant portion of that growth, which is being driven by massive players such as Microsoft, Amazon and Alphabet as they rapidly spend to build their processing capability.
The news is hopeful in an industry whose stocks have stalled to start the year, following a few years of massive growth. Many analysts have been questioning whether tech stocks have gotten ahead of themselves as they wait for growth to catch up with the investments being made.
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Stock market has soured on AI stocks, for now
Nvidia’s event comes while AI powerhouses — the big tech stocks behind the Magnificent 7 name — have been reeling to start the year. All seven of these blockbuster stocks are now down for the year, leading to a decline in the Nasdaq. In fact, the tech-heavy Nasdaq has fallen by more than 10 percent from its recent high, entering what market watchers call a “correction.”
Decline from 52-week high
| Apple (AAPL) | -16.1% |
| Microsoft (MSFT) | -17.3% |
| Alphabet (GOOGL) | -23.1% |
| Amazon (AMZN) | -21.8% |
| Meta Platforms (META) | -20.0% |
| Nvidia (NVDA) | -20.9% |
| Tesla (TSLA) | -52.4% |
Data as of March 19, 2025
These companies are mostly huge buyers of Nvidia’s chips, and they’ve been planning a massive spending binge as they roll out AI-enabled services and features. For example, Microsoft has planned capital spending of about $80 billion this fiscal year, which ends in June. This stunning amount helps build out the company’s data centers, which power AI apps, among other things.
But recently analysts have been questioning whether the AI industry is growing fast enough to warrant the premium put on the shares of Mag 7 stocks. Perhaps that’s not so surprising, given the massive runs in these tech stocks over the past two years, with Nvidia posting the highest gains of that lot as its AI chips were snapped by chip-hungry firms.
But the emergence of rival AI models such as DeepSeek has called into question how much sustained demand will exist for Nvidia’s chips. DeepSeek and other AI models have required much less computing power than popular models such as ChatGPT, leading many to speculate that the ongoing need for Nvidia’s chips won’t be as robust as investors currently expect.
With Nvidia’s decline from its 52-week high, the stock trades around 26 times analysts’ expectations for earnings in the current year. Those estimates imply earnings growth of around 51 percent. Yes, trees don’t grow to the sky, but this P/E multiple is not exactly high if Nvidia can deliver this year’s estimates and sustain even moderate growth in the years ahead.
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