Will NVIDIA's stock maintain its long-term uptrend despite a 15% drop and intensifying competition in AI?

NVIDIA (Ticker Symbol: NVDA) stock has dropped by 15% from its late November high, attracting market attention. Concerns include antitrust investigations in China and intensified competition in AI field from rival companies. The temporary trends in AI chip demand suggested by Microsoft's CEO have also had an impact.
However, NVIDIA's stock price still maintains the 200-day moving average line, and the long-term upward trend remains intact. According to analyst forecasts, there is a 34% potential upside to the target price, with an expansion in demand expected for the next generation Blackwell chips.
While caution is needed due to competition and geopolitical risks, NVIDIA's overwhelming leadership in the AI market suggests that the decline in stock price could be a good buying opportunity.

Intensifying competition in the AI market and NVIDIA's dominance.
NVIDIA has solidified its position as a leading company in the AI field, but the intensifying competition could affect its growth. Amidst major tech giants like Amazon and Microsoft accelerating their development of proprietary chips for AI, NVIDIA's GPUs are making visible strides to challenge in the market used for AI model training. Custom chips like Amazon's 'Trainium' and Microsoft's 'Azure Maia' are being deployed, aiming to enhance performance and reduce costs in the cloud sector.
However, NVIDIA's strength is not limited to just hardware. In the software field, advanced development environments such as the CUDA (Compute Unified Device Architecture) ecosystem are widely supported by data scientists and engineers. It is a fact that many companies leveraging AI choose NVIDIA products based on years of reliability and track record.
In this context, NVIDIA is preparing the next-generation Blackwell chip to compete. The new technology following the previous Hopper architecture is expected to achieve further evolution in terms of computational speed and efficiency. While competitors accelerate market entry, NVIDIA's advantage is supported by the competitive edge of 'integration of hardware and software', making short-term fluctuations less likely to disrupt long-term growth.
Geopolitical risks and their impact on the Chinese market

For NVIDIA, the Chinese market is one of the key pillars of revenue, and developments here are an essential factor. The emergence of antitrust investigations by the Chinese government has made NVIDIA's market share and future expansion uncertain. Particularly, NVIDIA's GPUs for AI are essential technologies for Chinese companies, but the increasing geopolitical tensions raise concerns about stricter export restrictions and market limitations.
In response, NVIDIA is strategically proceeding and attempting to maintain its market by providing product variations tailored to Chinese regulations. For example, developing GPUs such as 'A800' and 'H800' compliant with U.S. government export regulations is one way they continue to supply. This demonstrates NVIDIA's flexibility to continue business even under stricter regulations.
However, the possibility of further reinforcement of regulations cannot be ignored, and it is predicted that NVIDIA will continue to face a precarious situation in the future. On the other hand, as the AI market growth accelerates, there is a possibility that geopolitical risks may only be temporary factors of stagnation. If expansion in the Chinese market is constrained, resource concentration in other regions and the development of emerging markets will likely be key to future strategies.

The recent decline in NVIDIA stock can be attributed to profit-taking by investors and overall market instability. However, with a 165% increase in stock price over the past year, the firm foundation of its growth cannot be overlooked. Evaluating NVIDIA's value from a long-term perspective, its future as a central figure in the AI revolution remains promising.
Analysts have set a target price of $174.12, which is 34% higher than the current level, reflecting investors' expectations. In particular, if the Blackwell chip is introduced to the market, there is a high possibility that demand for AI and Datacenter will accelerate again, becoming a further catalyst for performance improvement.
NVIDIA's success lies in its 'comprehensive strength' that dominates hardware, software, and the entire ecosystem. While short-term fluctuations may occur as other companies enter the competition, the industry leadership of NVIDIA is not easily shaken. This decline may be an excellent opportunity for investors to bet on NVIDIA's long-term growth.

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