Nvidia Stock Closed Tuesday Down 6% After Hitting All-Time Highs: What Happened?

Nvidia Corporation NVDA shares traded lower on Tuesday following product announcements made during CES 2025. Broader weakness across markets following economic data Tuesday morning also appears to have weighed on shares. Here’s what you need to know.

What To Know: Nvidia shares briefly hit new all-time highs in pre-market trading Tuesday as investors cheered CEO Jensen Huang’s keynote address, which included several new product announcements.

Product Announcements:

• Cosmos Foundation Models: At CES 2025, Nvidia introduced Cosmos, a synthetic AI model designed to generate photorealistic video for training robots and self-driving cars. This technology aims to lower costs by reducing the need for traditional data-gathering methods like physical road testing or manual training.
• RTX 50 Series Gaming Chips: The company unveiled the RTX 50 series, powered by Blackwell AI technology, designed to enhance gaming graphics with more realistic textures and human facial detail generation. The new chips are priced between $549 and $1,999, with high-tier models arriving Jan. 30 and lower-tier models coming in February.
• Project DIGITS Desktop: Nvidia also revealed its first desktop computer, Project DIGITS, tailored for AI developers. Priced at $3,000, the desktop model runs Nvidia's data center hardware and will be available in March 2025.

Nvidia also announced a partnership with Toyota to integrate its Orin chips and software into advanced driver-assistance systems for several vehicle models. The company expects automotive hardware and software revenue to grow from $4 billion in 2025 to $5 billion in fiscal 2026.

Huang discussed the potential of the Cosmos foundation models, likening their impact on robotics to the transformation large language models have brought to enterprise AI. Huang expressed confidence in these advancements, especially the cost-saving benefits for training robots and cars.

Despite the launch of innovative products, including gaming chips, AI tools and automotive technologies, the stock's decline reflects broader investor skepticism.

Broader market indices sold off on Tuesday after the Institute for Supply Management released data showing a surprise surge in prices. The ISM's Services PMI climbed to 54.1% in December, versus estimates of 53.5%, and the ISM Prices index jumped to 64.4%, well above estimates of 57.5%, suggesting inflation continues to be sticky.

The SPDR S&P 500 SPY closed Tuesday down 1.12%, while Nvidia shares traded down from around $153 to around $140 by the end of the day.

Analyst Take: Bank of America’s Vivek Arya highlighted the challenge of scaling robotics into a reliable and cost-effective business, comparing it to niche markets like the metaverse. He noted that while these technologies are promising, it’s not clear if they will lead to substantial revenue growth. Arya maintained a Buy rating and price target of $190. Benchmark analyst Cody Acree also reiterated a Buy rating and price target of $190 Tuesday morning.

NVDA Price Action: Nvidia shares closed Tuesday down 6.22% at $140.84, according to Benzinga Pro.

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Photo: courtesy of Nvidia.