Nvidia Stock Performance, China Dependency, and Global Hardware Startup Landscape

Published: June 18, 2025

Nvidia's stock has experienced significant volatility over the past three years, reflecting its pivotal role in the AI revolution and the impact of geopolitical factors. This report provides a comprehensive analysis of Nvidia's stock performance, its dependency on the Chinese market, and the rise of global hardware startups that are challenging its dominance.

NVIDIA Stock Performance (2022–2025): A Volatile yet Rewarding Journey

Stock Price Volatility and Key Financial Metrics

Nvidia's stock fell approximately 66% from its November 2021 peak to October 2022, mirroring the broader tech downturn. However, the AI boom, particularly following the debut of ChatGPT in late 2022, reversed Nvidia's fortunes spectacularly. In 2023, Nvidia’s stock surged approximately 239%, and in 2024, it further increased by about 154%. The stock reached an all-time high of approximately $149.43 (post-split) in January 2025. During this rally, Nvidia's market capitalization surpassed $3.2 trillion, briefly overtaking Apple to become the world's second-largest US-listed company by market cap as of mid-2024. However, by April 2025, the stock retraced roughly 35% amid concerns about Chinese restrictions and potential slowing of AI spending.

The financial metrics of Nvidia over the past three fiscal years reflect this surge in stock performance. In FY2023, the company reported revenue of $26.97 billion and net income of $4.37 billion. In FY2024, revenue jumped to $60.92 billion, representing a 126% year-over-year increase, while net income soared to $29.76 billion. In FY2025, revenue further soared to approximately $130.50 billion, a 114% increase, and net income reached $72.88 billion.

Catalysts and Sentiment Driving Stock Swings

The stock's swings reflect various catalysts and sentiment changes. In 2023, the surge was driven by massive AI/data center demand, with Nvidia's data center sales (mostly GPUs for AI) tripling. In 2024, new product announcements such as the H100 "Blackwell" GPUs and bullish guidance further lifted the stock, even after a 10-for-1 split. By contrast, mid-2025 saw a pullback amid trade tensions and profit-taking. Notably, analysts point out that each major drawdown in Nvidia's past (2018, 2020, 2021) was followed by massive rebounds.

China Dependency: A Double-Edged Sword

Revenue Share and Impact of U.S. Export Controls

Nvidia derives a significant share of sales from China, but this exposure has been curtailed by U.S. export controls. In FY2025 (ending January 2025), only about 13.1% of reported revenue was billed to China. However, sales to China are often invoiced through Singapore, so the true China-linked sales may be much higher. Nvidia's own guidance now explicitly excludes China, with CEO Jensen Huang announcing that the company will no longer count China revenue in its forecasts. U.S. curbs on high-end GPU exports have effectively shut off the approximately $50 billion Chinese AI/data center market to Nvidia. These measures have already dented revenue. In the first quarter of FY2026 (ending April 2025), Nvidia reported $4.6 billion of "H20" GPU sales, and the China business accounted for 12.5% of revenues. Export bans cost approximately $2.5 billion of sales in Q1 and are expected to remove about $8 billion from Q2. CFO Colette Kress noted that China data center revenue "declined" under the curbs. CEO Huang warned publicly that export controls have forced Nvidia to write off "billions" of China sales and allowed Chinese rivals to gain ground. In fact, Huang claimed that Nvidia's share of China's AI chip market fell from approximately 95% to 50% since 2021.

Risks and Uncertainties

China was an outsized but now uncertain growth market for Nvidia. The company acknowledged it is "effectively foreclosed from China's $50 billion data center market" until new chip designs or policy changes occur. Many analysts view China restrictions as a key risk. One noted that if China sales remain shut out, calendar-2026 revenue could be materially lower. On the flip side, some stock watchers argue that excluding China from forecasts removes volatility. Non-China sales now underpin guidance, so any China revenue upside would be a surprise.

Future Outlook: Analysts' Views and Tailwinds

Analyst Consensus and Price Targets

As of mid-2025, 43 analysts cover Nvidia and give it a consensus "Moderate Buy" (mean score ≈3.1 out of 4). The average 12-month price target is around $173, roughly 20% above the mid-$140s trading range, reflecting further upside expected as AI deployments accelerate. Top firms reiterate Overweight/Buy ratings. For example, Morgan Stanley named Nvidia a top pick with a $166 target for 2025, and Citi has forecasts of similar magnitude.

Valuation and Growth Prospects

Nvidia's valuation is high relative to most tech stocks but has come down from peak levels. Its P/E is currently in the mid-40× range, below its 3- and 5-year averages (≈69×) and below the ≈68× tech growth-stock norm, but still above legacy tech (Microsoft ≈37×). Analysts often argue that the rich valuation is justified by Nvidia's hypergrowth. The forward P/E for the next fiscal year is ≈30×, reasonable for a 50%+ EPS growth outlook. Looking ahead, the main tailwinds are continued AI/data center demand and platform leadership. Nvidia's GPUs remain the industry standard for training and inference. Major cloud providers, including Microsoft, Google, Amazon, and Meta, have publicly budgeted billions for AI infrastructure, which should support Nvidia sales. In its latest guidance, Nvidia forecast approximately $45 billion revenue in Q2 FY2026, even after subtracting about $8 billion from China restrictions. The company cited "tens of gigawatts" of pipeline AI projects, suggesting robust medium-term demand.

Risks and Headwinds

Several risks temper the outlook. Aside from China, one is competition or AI model shifts. A senior analyst warned that more efficient AI models could reduce GPU demand, contributing to Nvidia's share pullback from highs. Economic slowdown or capital budgeting pulls could also constrain enterprise spending. Nvidia's history suggests that large share-price drops (35%+ drawdowns) have occurred occasionally, though they were followed by strong rebounds historically.

Global AI Chip Startups: Challengers to Nvidia's Dominance

Key Startups and Their Innovations

Several well-funded startups worldwide are developing AI chips and platforms to challenge Nvidia's dominance. These include:

• Cerebras Systems (USA): Builds wafer-scale AI processors. Its CS-3 supercomputer uses the "WSE-3" chip (44 GB SRAM, 900k cores), achieving up to 125 petaFLOPS for AI workloads. Cerebras has raised roughly $715–720 million in venture funding to date. A Series F round in June 2024 implied a valuation of ~$3.0 billion, which jumped to ~$6.1 billion by July 2024. Cerebras claims dramatically faster inference speeds than GPU clusters.

• Tenstorrent (Canada/USA): Founded by ex-Apple/AMD engineers. It raised ~$693 million in late-2024 financing (valuation ~$2.6 billion) led by Bezos Expeditions, Samsung, LG, Fidelity, etc. Tenstorrent develops RISC-V-based AI accelerators and an upcoming RISC-V CPU, aiming to rival GPUs for data center AI.

• Biren Technology (China): A Shanghai-based fabless chipmaker founded in 2019 by former NVIDIA/Alibaba engineers. Biren designed the BR100 and BR104 GPUs targeting Chinese data centers. However, U.S. export bans abruptly halted its TSMC production. Biren quickly re-engineered chips to meet restrictions and secured a $280 million funding pledge from local government investors.

• Graphcore (UK): Known for its IPU (Intelligence Processing Unit) chips optimized for machine learning. Graphcore raised >$710 million over multiple rounds and reached a ~$2.8 billion valuation. In 2024, SoftBank agreed to acquire Graphcore for only ~$500 million.

• Groq (USA): Founded by ex-Google TPU architects. Groq makes the "LPU" (Language Processing Unit) inference chip. In August 2024, it raised $640 million, bringing total funding above $1 billion and valuing the company at ~$2.8 billion. Groq claims its single-core ASIC can run large language models ~10× faster than GPUs at 1/10th the power.

• SambaNova Systems (USA): Provides AI hardware+software platforms (DataScale) for enterprise AI. SambaNova has raised over $1.1 billion in funding. Its Raptor and SN10 chips implement a "dataflow" architecture with reconfigurable processing tiles. SambaNova targets large enterprises and government labs with turn-key AI systems.

Competitive Landscape and Nvidia's Position

Each of these startups is far smaller than Nvidia but backed by significant capital. They aim to capitalize on the AI supercomputing trend by offering alternatives to GPU-centric designs. Nvidia remains the clear market leader, with TechInsights estimating ~65% share of data-center AI chips in 2023. However, these challengers could potentially nibble at Nvidia's dominance. In particular, Chinese players like Biren, Cambricon, and Hygon are being strongly supported by local funds, potentially pressuring Nvidia in that market if/when restrictions ease. Meanwhile, U.S. and European startups like Cerebras, Groq, Graphcore, and SambaNova continue innovating specialized architectures—supplementing rather than supplanting GPU use in AI data centers for now.

Conclusion: Navigating the New Normal

Nvidia's stock performance from 2022 to 2025 reflects its significant role in the AI revolution, despite volatility driven by market dynamics and geopolitical factors. While China has been a crucial market, U.S. export controls have introduced uncertainties and risks. However, the global AI hardware startup landscape, though competitive, is yet to displace Nvidia's dominance. As the AI market continues to evolve, Nvidia's ability to innovate and adapt will be crucial in maintaining its leadership position. Investors should remain mindful of both the opportunities and risks associated with Nvidia's growth trajectory in this rapidly changing landscape.

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This analysis is based on data from Nvidia's public filings and press releases, financial press and analyst reports, and various industry sources. Figures and projections are subject to change based on policy modifications and market responses.