Nvidia delivered another quarter of eye-popping growth — revenues surged 85% — yet its stock tells a far more cautious story. Shares have slipped roughly 6.5% over the past week, hovering near €176, well below the May record. The disconnect between operational brilliance and market sentiment is rarely this wide, and the culprit lies not in the financial statements but in Washington.
The regulatory vise is tightening fast. In June, the US Commerce Department closed a loophole that allowed advanced Blackwell chips to reach China through foreign subsidiaries. The damage is already visible: Nvidia lost an estimated $2.5 billion in potential revenue in a recent quarter and took a $4.5 billion write-down on inventory. Chief Executive Jensen Huang has conceded that the company has effectively ceded the Chinese market to local rival Huawei. Nvidia’s share of Chinese AI accelerator demand has fallen from nearly 95% to about 55%, while Huawei has snapped up roughly 20%.
The political headwinds extend beyond trade rules. Huang recently declined an invitation from Senator Elizabeth Warren to testify before the banking committee on AI and China. Warren publicly criticised the refusal, arguing the public deserves answers. That episode underscores just how deeply Nvidia is now entangled in geopolitics — a reality that no amount of operational prowess can fully escape.
Yet the company is also crafting a new narrative to offset those pressures. Physical AI — the push to put Nvidia’s software and chips into vehicles, robots, and factories — is emerging as the next growth engine. The recent unveiling of the Alpamayo 2 Super platform, aimed at autonomous vehicle developers, signals a shift from pure chip supplier to ecosystem orchestrator. Reports of an expanded alliance with Hyundai reinforce the strategy: Nvidia wants to provide the operating system for the machine world.
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At the same time, sovereign AI demand is filling the China-shaped hole. Government spending on AI infrastructure has tripled year-over-year, surpassing $30 billion. Countries such as the UK, Japan, and Saudi Arabia are building state-funded data centres, treating AI compute as strategic national infrastructure. Unlike cloud giants that answer to quarterly earnings, sovereign clients invest for long-term survival, creating what looks like a remarkably stable demand base.
Technically, the stock is in a consolidation phase. At roughly €176, it is trading just below the 50-day moving average of €176.76, with an RSI near 44 — neutral territory. The distance to the 200-day average is a comfortable 9%, suggesting no collapse. The stock sits about 13% below its all-time high, and while the recent weakness is real, it sits within an intact uptrend.
What makes Nvidia so hard to read right now is the collision of two powerful forces. The China drag and regulatory uncertainty are real and measurable. But the expansion into physical AI, sovereign infrastructure, and the broader robotics ecosystem gives the bull case fresh fuel. After a 41% gain over the past twelve months, the market is demanding tangible proof that the new stories can match the old ones. That tension — between political friction and technological ambition — is likely to define Nvidia’s next chapter.
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