Nvidia stock was staging a modest comeback early Wednesday, as the chipmaker sought to recover from Tuesday’s 4% decline amid mounting concerns over artificial intelligence valuations and renewed uncertainty about US chip sales to China.
AI-related stocks broadly weakened on Wednesday as sentiment remained cautious following a strong run-up across the sector this year.
Advanced Micro Devices (AMD) dropped 5% in early trading on Wednesday, despite management emphasising that “demand for compute has never been greater” during its post-earnings call.
Investors appear increasingly uneasy about whether companies tied to the AI boom can sustain their lofty valuations.
Nvidia, which remains one of the primary beneficiaries of AI infrastructure spending, continues to trade near record highs despite volatility in recent weeks.
China sales prospects dim
The Trump administration confirmed Tuesday that it has no plans to pursue resumed sales of Nvidia’s advanced AI chips to China, narrowing one of the few remaining potential catalysts for near-term upside.
White House press secretary Karoline Leavitt said that President Donald Trump and Chinese President Xi Jinping did not discuss Nvidia’s chip exports during their meeting in South Korea last week.
“As for the most advanced [Nvidia] Blackwell chip, that’s not something we’re interested in selling to China at this time,” Leavitt said.
The statement effectively closes the door on hopes that export restrictions might be relaxed, reinforcing the geopolitical headwinds Nvidia faces as Washington continues to limit China’s access to cutting-edge AI hardware.
Michael Burry’s betting against AI
In a separate development, investor Michael Burry, best known for predicting the 2008 financial crisis, resurfaced on X (formerly Twitter) to warn of what he called a speculative bubble in the AI sector.
Burry, who runs Scion Asset Management, returned to social media after a two-year hiatus with a cryptic post that read: “Sometimes, we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play.”
The final sentence, referencing the 1983 film WarGames, underscored Burry’s belief that the current AI-driven market exuberance could end in widespread losses.
His words were backed by actions. According to regulatory filings, Scion purchased bearish put options on 1 million Nvidia shares and 5 million Palantir shares, valued at roughly $187 million and $912 million, respectively.
Those trades now dominate Scion’s US stock portfolio, which includes just eight holdings in total and only four direct equity positions worth a combined $68 million.
Analysts remain bullish despite volatility
Despite near-term turbulence and high-profile scepticism, analysts remain largely optimistic about Nvidia’s long-term trajectory.
Loop Capital maintained its Buy rating earlier this week, raising its price target to $350 from $250.
Analyst Ananda Baruah forecast that Nvidia could double its GPU shipments to 2.1 million units by early 2026 while continuing to benefit from rising average selling prices.
Goldman Sachs also reiterated its Buy rating last week, lifting its price target to $240 ahead of Nvidia’s upcoming third-quarter results.
The firm expects the company to post a “beat-and-raise quarter,” citing robust data center demand fueled by AI investment.
Goldman analyst James Schneider said investors would be focused on Nvidia’s “$500 billion Datacenter revenue forecast, OpenAI deployments in CY26, and the Rubin ramp in CY26.”
The bank also raised its data center revenue estimate by 13%, citing stronger hyperscaler capital spending and positive management commentary.
Goldman’s third- and fourth-quarter earnings estimates of $1.28 and $1.49 per share remain 3% and 5% above the Street consensus, reflecting continued confidence in Nvidia’s ability to deliver growth despite geopolitical and valuation pressures.
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