A seismic shift in ownership has sent ripples through Nvidia’s investor community. The Japanese technology conglomerate SoftBank liquidated its entire stake in the semiconductor leader during October, realizing proceeds of $5.83 billion. This unexpected departure by a major investor from one of the most valuable artificial intelligence companies prompts a critical market assessment: does this signal a substantial correction for Nvidia, or merely a temporary setback within the ongoing AI expansion?
Supply Chain Validation Strengthens Bull Case
The optimistic outlook for artificial intelligence receives strong confirmation from Nvidia’s crucial manufacturing partner. Foxconn, the Taiwanese electronics manufacturing giant, reported a 17% year-over-year profit surge in the third quarter, primarily driven by robust demand for AI servers. The company achieved a net profit of 57.67 billion Taiwanese dollars ($1.89 billion), surpassing all market expectations. Foxconn CEO Young Liu expressed significant optimism regarding AI market development through 2026, emphasizing that this technological evolution is “only just beginning.”
Substantial Sell-Off Creates Market Waves
SoftBank disposed of approximately 32.1 million Nvidia shares—a substantial divestment that generated considerable market turbulence. The disclosure triggered notable selling pressure on Tuesday, elevating volatility for the chipmaking behemoth. Shares, which had enjoyed strong upward momentum on Monday, experienced a sharp reversal. This reaction demonstrates the market’s heightened sensitivity to portfolio adjustments by institutional investors, even when involving established technology sector leaders.
Unprecedented Demand Underpins Strong Fundamentals
Beneath the short-term volatility lies a foundation of remarkable business momentum. During its recent GTC conference, Nvidia disclosed figures that astonished industry analysts: cumulative orders for its Blackwell and Rubin chip architectures scheduled for delivery in 2025-2026 reached a staggering $500 billion. This enormous order pipeline underscores the sustained corporate demand for AI computing infrastructure across global enterprises.
Market researchers have responded with upward revisions:
– Jefferies raised its price target from $220 to $240
– Morningstar increased its fair value estimate from $190 to $225
– The consensus average price target among analysts now stands at $234.51
Should investors sell immediately? Or is it worth buying Nvidia?
Infrastructure Challenges Emerge in Rapid Growth Sector
The accelerated expansion of the AI industry is revealing initial operational complexities. CoreWeave, an AI cloud provider utilizing Nvidia technology, saw its shares decline over 16% despite exceeding revenue expectations. Construction delays for data centers forced the company to postpone revenue recognition, highlighting implementation challenges within the rapidly scaling AI infrastructure sector. Barclays analysts had previously cautioned about “operational risks” associated with large-scale AI data center projects.
Market Leadership Remains Unquestioned
Despite current investor uncertainty, Nvidia maintains a formidable market position. The corporation constitutes approximately 8% of the entire S&P 500 index weighting, ranking among the most influential individual components within major index funds. With a market valuation around $4.7 trillion, Nvidia continues to solidify its status as the world’s most valuable semiconductor enterprise.
The integrated ecosystem encompassing GPU and CPU technologies, networking infrastructure, and software solutions continues to provide Nvidia with substantial competitive advantages. The combination of extensive forward order visibility, optimistic supplier commentary, and persistent market dominance suggests stable operational foundations—even as major investors periodically reassess their holdings.
The pivotal question for market participants remains: will SoftBank’s exit influence investment decisions, or will confidence in Nvidia’s extraordinary AI pipeline prevail?
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