Why Nvidia stock may rebound after recent losses

Shares of NVIDIA Corporation moved higher on Wednesday, rising as much as 1.67% before paring gains to trade about 0.6% higher.

The advance came after the chipmaker closed the first quarter on a stronger note, even as it logged its second consecutive quarterly decline.

The stock has fallen 6.5% over the past three months through Tuesday’s close, marking its longest losing streak since late 2022.

That earlier downturn preceded the launch of ChatGPT, which sparked the current artificial intelligence boom and fueled Nvidia’s surge to become a dominant force in AI hardware.

Despite a 5.6% jump on Tuesday and modest gains on Wednesday, Nvidia shares remain below the levels above $190 seen at the end of January.

The pullback has been attributed to broader market rotation linked to geopolitical tensions involving Iran and growing questions around the sustainability of AI-related spending.

Historical trends offer optimism

While recent performance has been under pressure, historical data suggests a potential rebound.

Over the past decade, Nvidia has delivered an average gain of around 12% in the month following a losing streak of two or more months, according to Dow Jones Market Data.

This period coincides with Nvidia’s transformation from a gaming-focused chipmaker into the leading supplier of AI processors.

However, the company now faces a shifting landscape as the next phase of AI development takes shape.

“The stock’s dip is probably more panic and less thesis collapse. Until proven otherwise, Nvidia is still the leader, but the burden of proof has shifted,” said Bill Birmingham, managing director of REX Financial in a Barron's report. “The question is no longer whether it can dominate the training boom; it is whether it can stay central as AI spending broadens into inference, orchestration, and more customized compute.”

Data center business drives growth

Nvidia’s data center segment remains its primary growth engine.

The unit generated $62.31 billion in revenue in the fourth quarter of fiscal 2026, accounting for 91.5% of total sales. This represented a 75% year-over-year increase and 22% sequential growth.

Demand has been driven by accelerated computing, generative AI, and large-scale model training across cloud providers and enterprise customers. The rollout of the GB300 platform and expanded adoption of networking technologies such as NVLink and Spectrum-X have further supported momentum.

Looking ahead, Nvidia expects continued strength from Blackwell shipments and increasing orders tied to cloud, sovereign AI, and enterprise AI initiatives. Emerging trends such as agentic AI, long-context workloads, and advanced inference systems are also expected to support long-term demand.

Strategic investments expand AI ecosystem

Alongside organic growth, Nvidia has been aggressively investing to secure its position across the AI value chain.

The company has committed at least $18 billion to public company investments over the past six months.

Recent moves include a $2 billion investment in Marvell Technology to enhance connectivity within its AI infrastructure via NVLink. It also invested $2 billion in Nebius to support large-scale AI system deployment by 2030.

Additional investments span critical supply chain components, including stakes in Lumentum and Coherent for optical technologies, as well as a $2 billion position in CoreWeave to expand AI data center capacity.

Nvidia has also deepened partnerships with Intel and Synopsys to strengthen chip design capabilities.

Beyond hardware, the company is securing energy resources and backing private AI firms such as OpenAI, underscoring its strategy to lock in infrastructure and capacity as AI demand scales.

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