Shares of NVIDIA Corp (NASDAQ:NVDA) and other semiconductor stocks are trading lower Tuesday amid investor concern over the future of a massive artificial intelligence project. Here’s what investors need to know.
What To Know: The pressure follows reports that Stargate, the ambitious $500 billion AI infrastructure joint venture between SoftBank and OpenAI, is facing significant delays and has scaled back its near-term goals.
Six months after its high-profile launch, the venture has reportedly failed to secure any major data center deals due to persistent disagreements between its partners over strategy and control. The Wall Street Journal reports the project, which initially included a promise of a $100 billion immediate investment, is now focused on building a single, smaller facility in Ohio.
The slowdown is a potential headwind for chipmakers like Nvidia, as large-scale AI build-outs are a key driver of demand for their advanced processors. The perception of waning momentum for what was expected to be a cornerstone project is rattling investor confidence.
What Else: For Nvidia specifically, the impact is direct and significant. The company’s record-breaking revenue and stock valuation are overwhelmingly driven by sales of its data center GPUs, like the H100 and the new Blackwell platform, which are essential for building and training large AI models.
A colossal project like Stargate was seen as a potential customer for these high-margin chips. The project's failure or delay removes a potential source of projected demand from future revenue forecasts.
Benzinga Edge Rankings: According to the latest Benzinga Edge stock rankings, Nvidia demonstrates a powerful profile for growth and momentum, but scores very poorly on value. The company boasts an exceptional Growth score of 98.70 and a strong Momentum score of 85.67.
These figures suggest Nvidia exhibits outstanding fundamental growth and that its stock price has been performing robustly compared to peers. However, this performance comes at a premium, as reflected in a very low Value score of just 6.31, indicating the stock is considered expensive.
Price Action: According to data from Benzinga Pro, NVDA shares are trading lower by 2% to $167.96 Tuesday afternoon. The stock has a 52-week high of $174.25 and a 52-week low of $86.62.
Read Also: AI Bubble Is More Unhinged Than Dot-Com—A Chilling Warning From The Inside
How To Buy NVDA Stock
Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.
For example, in Nvidia’s case, it is in the Information Technology sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.
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