Shares of Nvidia (NVDA) remained under pressure on Wednesday, extending recent losses despite blockbuster earnings and an aggressive long-term expansion plan tied to Taiwan’s semiconductor ecosystem.
The stock fell around 2% to roughly $209.26 in early trading after closing lower Tuesday for its third consecutive losing session.
The weakness came even after Nvidia once again delivered results that exceeded Wall Street expectations and reinforced its dominant position at the center of the artificial intelligence boom.
According to FactSet data, Nvidia has now surpassed analyst expectations on both revenue and operating income for 14 consecutive quarters.
The company reported first-quarter revenue growth of 85% year-over-year and guided for even faster expansion in the current quarter.
Still, investors appeared reluctant to aggressively chase the stock higher following its enormous multi-year rally and market capitalization above $5 trillion.
Nvidia doubles down on Taiwan
Chief executive Jensen Huang attempted to reinforce Nvidia’s long-term AI infrastructure ambitions during an event in Taipei marking the launch of the company’s new Taiwan campus.
Huang said Nvidia plans to spend as much as $150 billion annually with Taiwanese suppliers, up from roughly $100 billion currently.
He did not specify a timeline for the increase.
The announcement highlighted Nvidia’s deepening reliance on Taiwan’s semiconductor ecosystem, particularly its relationship with Taiwan Semiconductor Manufacturing Company, Nvidia’s most critical manufacturing partner.
Huang is in Taiwan ahead of Computex, the island’s flagship technology conference that has increasingly become a showcase for global AI infrastructure development.
Nvidia’s spending commitment also arrives amid growing geopolitical concerns surrounding Taiwan and the global semiconductor supply chain.
Those concerns intensified after Donald Trump recently suggested a pending $14 billion US arms package for Taiwan could potentially be used as leverage in negotiations with China following his summit with Chinese President Xi Jinping.
Valuation debate intensifies
Despite Nvidia’s operational strength, investor sentiment has become increasingly cautious following the stock’s explosive gains over the past two years.
The post-earnings pullback has left Nvidia trading at a forward price-to-earnings multiple slightly above 22 times, according to FactSet data.
That remains well below many semiconductor peers, including Intel at roughly 95 times forward earnings and Advanced Micro Devices near 47 times.
Investors use P/E multiples to gauge a stock’s valuation relative to its anticipated future earnings.
With the growth of online trading apps, tracking such metrics has become significantly easier and more accessible to market participants.
Analysts increasingly argue Nvidia’s valuation no longer fully reflects the company’s dominant role in AI infrastructure and accelerating compute demand.
The average Wall Street price target on Nvidia has climbed to roughly $294, while about 93% of analysts covering the stock maintain Buy-equivalent ratings.
Several major firms, including Goldman Sachs, Morgan Stanley, Needham, and Baird, recently raised their price targets following the company’s earnings report.
Even so, the muted stock reaction suggests investors may now be demanding evidence that Nvidia can sustain its extraordinary growth trajectory as competition intensifies across the AI semiconductor landscape.
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