Nvidia’s share price has taken a double hit this week, sliding 7.23% to close at €168.80 on Friday. The decline comes despite the company reporting a quarterly revenue haul of over $81 billion and annual sales of $216 billion—up 65% year-over-year. Investors are looking past the record numbers and focusing on two emerging threats: a sharp drop in cloud rental prices for the latest Blackwell B200 chip, and the unveiling of a rival processor by OpenAI.
The fall in GPU rental rates on major cloud platforms has become a real-time barometer of near-term demand for AI compute. After peaking in May, the cost to lease a single Blackwell B200 collapsed through mid-June. While not a signal of a structural demand bust, the move points to a temporary oversupply as hyperscalers build out capacity faster than new AI projects can absorb it. For a stock that has long priced in Nvidia’s ability to command ever-higher prices, any hint of pricing weakness triggers an immediate de-rating.
OpenAI intensified the pressure with the launch of its first in-house chip, dubbed Jalapeño. Co-designed with Broadcom and manufactured by TSMC at the 3-nanometer node, the specialized chip targets inference—the execution of AI models—and promises to slash costs by roughly 50%. That puts it squarely in competition with Nvidia’s most lucrative revenue stream, though training workloads will still run on Nvidia hardware. The move underscores that even Nvidia’s largest customer sees value in breaking its dependency.
The stock’s technical picture reflects the souring sentiment. Nvidia now trades nearly 7% below its 50-day moving average and more than 16% off the 52-week high of €202.50 reached in May. The relative strength index stands at 38.2, territory that usually signals an oversold condition, yet no clear buying catalyst has emerged. The 200-day line at €163.66 looms as the next key support; a break below that level could accelerate selling.
Despite the short-term headwinds, Nvidia is not standing still. CEO Jensen Huang used the annual shareholder meeting to declare the company’s full-scale transition into production with the new Vera Rubin platform, which he called one of the most important products in its history. Alongside the Rubin GPU, the Vera CPU marks Nvidia’s first foray into general-purpose processors, expanding its addressable market beyond AI accelerators.
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Management is also working overtime to keep shareholders onside. The board authorized an $80 billion share buyback program and raised the quarterly dividend. Huang promised to return more than half of free cash flow to investors, a pledge that helped underpin a 27% gain in the stock over the past twelve months. Year-to-date, however, that cushion has shrunk to barely 5%.
The competitive moat that has long protected Nvidia rests primarily on software, not hardware. The CUDA ecosystem—the industry standard for AI development—creates enormous switching costs. Thousands of models and millions of engineers are tied to CUDA-optimised libraries, and migrating to an alternative would require rebuilding entire software stacks. While custom chips like Jalapeño may nibble at the edges of inference workloads, they do little to threaten the core training market or the network effects of CUDA.
Geopolitical risks add another layer of complexity. US export controls continue to block Nvidia from selling its most advanced chips to China, one of the world’s largest AI markets. The H200 has received regulatory approval for the region, but the company has yet to book meaningful revenue there. This structural headwind persists even as Huang forecasts a massive global processor market.
Wall Street analysts remain broadly bullish, albeit with a wide dispersion of views. Consensus price targets range from $250 to $500, with an average of $295 according to some surveys and $309 in others. The majority still rate the stock a strong buy, but the gap between the highest and lowest forecasts suggests deep uncertainty about how the next phase of the AI cycle will unfold.
The coming weeks will be decisive. If GPU rental rates stabilize, the immediate selling pressure should ease. If the stock breaks below €163.66, a fresh wave of technical selling could follow. For now, Nvidia is caught between a cooling hardware market and a software monopoly that remains formidable—but no longer immune to attack.
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