In the ongoing Tariffs, tumbles, and more than an AI drama, the stocks of Nvidia have had investors gripping their portfolios, as they move in wild fluctuations with new tariff talks and heightened chip wars. Shares fell nearly 6% on Thursday before bouncing back at 1.2% in premarket trading Friday. This comes hot on the heels of a 19% surge Wednesday, where President Trump announced a 90-day delay on most reciprocal tariffs, a moment that sparked a brief glimmer of hope.

The hopes were quickly sunk, as the White House later on confirmed  that total tariffs on Chinese goods surged to 145%, restoring fears of retaliatory measures in the economic realm. So far, Nvidia is walking on a thin line and protecting itself from getting a direct hit of these sanctions. On the other hand, China’s Friday move to raise tariffs on U.S goods to 125% puts American tech companies with global exposure in distress.

Wall Street Recalculates

Citi Analyst Atif Malik, reduced his Nvidia GPU sales projections by an average of 3% for this year and 2026, along with cutting his price target on stock to $163 from $150. However, he has maintained a Buy rating, emphasizing the solid foundations of the company as well as its leadership in the AI space. Despite an incredible level of short-term turbulence, he alone saw value in holding or buying stocks for the long-term.

With the trauma continuing from the U.S tariff shaking the investor nerves, Nvidia is still at the heart of the AI gold rush. Speaking at 2025 GTC, CEO Jensen Huang projected that global expenditure for data centers would reach $1 trillion by 2028, growing from a mere $400 billion in 2024. The GPUs of Nvidia are widely used in training AI models, thus giving it a profitable position in a fast growing stream.

The AI Arms Race

Nvidia’s share of AI power is still far from shaken despite immense threats posed by trade policies, its trailing 12 month revenue of $130 billion, and chipmakers in the rival camp. Those in-house chips of Amazon and Google are pushing harder with Amazon’s latest Trainium and Google’s new Ironwood TPU, but they still are critically dependent on Nvidia’s hardware.

Even though Google Cloud has committed to being among the first to use Nvidia’s next-generation Vera Rubin AI Chips, the company still has a lot at stake as the competition gets stiff. Nvidia’s NVL72 system gives as much as 30x advancements in inference and 4x in training efficiencies, thus keeping the company in control of the technology race.

What some are questioning, is whether Nvidia will be able to sustain that edge when the focus of the industry shifts from training to inference? The company claims that inference actually makes up 40% of its data center revenue and is growing faster. Amazon CEO Andy Jassy wrote in a shareholder letter Thursday, “AI does not have to be as expensive as it is today, and it won’t be in the future. Chips are the biggest culprit. Most AI to date has been built on one chip provider.”

Assessing Growth

For some investors, Nvidia is now trading at the most attractive valuation in over a year, following the recent sell-off. Its price-to-earnings ratio is at its lowest since 2023 and its forward price-to-earnings ratio has dropped to levels seen in early 2024. While Wall Street is forecasting an enormous 56% revenue growth this year and 23% next year.

Nvidia’s price seems not too bizarre compared to the forward P/E of 20 for S&P 500, it is also appropriate for a company at the forefront of what will probably be the most important technology shift in the decade. For long-term investors willing to accept near-term volatility, Nvidia’s all-time high drop of 26% might be an opportunity rather than warning.

With most chip rivals such as AMD and Broadcom also rising, and with China claiming it will not initiate further tariff tensions, this definitely looks more like a dip than a downfall for Nvidia. For now, all eyes are on whether Wall Street sees this time as an opportunity to buy, or is it just a pause before another leg down. Short-term panic has clouded long-term opportunity, and Wall Street may underestimate how wide Nvidia’s trench actually is. Today, when data is oil and AI is electricity, Nvidia is not just another chip-maker, it is really building the grid for you. This dip might be the first act in a very profitable encore for patient and convinced investors.