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£10k invested in Nvidia stock at the start of the year is currently worth…

£10k invested in Nvidia stock at the start of the year is currently worth…

  • 21.03.2025 11:58
  • fool.co.uk
  • Keywords: AI

A £10k investment in Nvidia stock is now worth around £8,940 after a 10.6% drop since January. The decline was driven by competition from DeepSeek AI and U.S. tariff threats, but Jon Smith sees this as a temporary dip, with long-term growth potential for the company.

Nvidia NewsNvidia ServicesNVDAsentiment_dissatisfiedAAPLsentiment_dissatisfiedMSFTsentiment_dissatisfied

Estimated market influence

Nvidia

Nvidia

Negativesentiment_dissatisfied
Analyst rating: Strong buy

Stock price fell due to competition from DeepSeek AI model and tariff threats.

DeepSeek

Negativesentiment_dissatisfied
Analyst rating: N/A

AI model caused Nvidia shares to dip.

Apple

Apple

Negativesentiment_dissatisfied
Analyst rating: Buy

Shares down 13.8% over the same period.

Microsoft

Microsoft

Negativesentiment_dissatisfied
Analyst rating: Strong buy

Shares down 8% over the same period.

Context

Analysis of Nvidia Stock Performance and Market Implications

Key Facts and Data Points

  • Stock Price Movement:

    • Started the year at $134.
    • Currently trading at $120, reflecting a 10.6% decline over three months.
    • £10k investment is now worth £8,940.

  • Year-on-Year Performance:

    • Still up 32% compared to last year.

  • Market Context:

    • Nasdaq index down 8% over the same period.
    • Apple shares down 13.8%, Microsoft shares down 8%.

Market Trends and Business Impact

  • Short-Term Decline Triggers:

    • News about DeepSeek AI model: Concerns over competition led to a dip in AI-related stocks, including Nvidia.
    • Tariff threats by President Trump: Uncertainty around tariffs on Mexico, Canada, China, and the EU impacted investor sentiment.

  • Long-Term Potential:

    • Nvidia remains at the forefront of AI innovation.
    • High growth potential due to rapid advancements in AI adoption and development.

Competitive Dynamics

  • Rising Competition:
    • DeepSeek AI model poses a competitive threat, impacting investor confidence.
  • Strategic Positioning:
    • Nvidia's leadership in AI suggests it is well-positioned for long-term growth despite short-term challenges.

Strategic Considerations and Long-Term Effects

  • Investment Perspective:

    • The recent decline may be a temporary "blip" rather than a sign of long-term stagnation.
    • Investors with a long-term horizon could benefit from Nvidia's continued innovation and market leadership.

  • Regulatory and Tariff Risks:

    • Uncertainty around tariffs remains a key risk for global companies like Nvidia, potentially impacting operations and profitability.

Conclusion

Nvidia's stock decline appears to be driven by short-term factors such as competition and geopolitical uncertainty. However, its position in AI innovation suggests significant long-term growth potential. Investors should consider both the immediate market dynamics and the company's strategic advantages when evaluating its prospects.