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Shares of Nvidia (NVDA) fell sharply on Friday, pulling back after an explosive rally that had pushed the chipmaker close to another record valuation milestone.
The stock dropped around 4% to $226.80 in early trading after gaining roughly 20% over the previous seven sessions.
Thursday’s rally alone saw Nvidia rise 4.4% to close at $235.75, extending a powerful surge driven by growing enthusiasm around artificial intelligence infrastructure spending and hopes for renewed access to the Chinese market.
The broader market also weakened Friday as investors reacted cautiously following the conclusion of meetings between US President Donald Trump and Chinese President Xi Jinping.
The S&P 500 fell 1%, while the Nasdaq Composite declined 1.4%. The Dow Jones Industrial Average lost 336 points, or 0.7%.
Rising Treasury yields and profit-taking across technology stocks also weighed on sentiment after the sector’s recent strong run.
Earnings expectations continue to drive Nvidia
Despite Friday’s decline, investor enthusiasm around Nvidia remains heavily tied to expectations for the company’s earnings report scheduled for next Wednesday.
The company has become the central beneficiary of the global AI infrastructure boom, with hyperscalers, governments, startups, and enterprises all racing to secure advanced AI computing capacity.
According to Visible Alpha consensus estimates, Nvidia is expected to generate roughly $78.5 billion in fiscal first-quarter 2026 revenue.
The company’s data center business continues to dominate growth expectations.
Consensus forecasts now project data-center revenue of approximately $72.8 billion for the quarter, reflecting continued massive demand for AI accelerators and GPU systems.
That estimate has risen dramatically from projections near $53.8 billion less than a year ago.
Investors remain focused not only on Nvidia’s quarterly results, but also on guidance surrounding future AI demand, production capacity, margins, and Chinese sales opportunities.
China optimism adds fuel to rally
Part of Nvidia’s recent surge was driven by reports that the United States approved several Chinese firms to purchase Nvidia’s H200 processors.
The H200 chips are specifically designed to comply with US export restrictions while still serving Chinese AI customers.
China remains a crucial market for Nvidia despite years of tightening restrictions on advanced semiconductor exports.
Recent optimism around a potential easing of trade tensions during the Trump-Xi summit added further support to Nvidia shares earlier this week.
Investor excitement was also boosted after disclosures showed that Trump’s trust had purchased at least $1 million in Nvidia-linked securities during the first quarter.
The developments helped lift Nvidia’s market capitalization to nearly $5.7 trillion, up sharply from around $4.7 trillion just over a week ago.
AI spending boom remains central theme
The broader AI infrastructure narrative continues to underpin Nvidia’s long-term outlook.
Technology giants, including Microsoft, Meta, Amazon, and Alphabet, have all significantly increased capital expenditure forecasts tied to AI infrastructure buildouts.
That spending wave has reinforced expectations that Nvidia’s GPUs will remain the dominant backbone of AI training and inference workloads globally.
While investors took profits Friday following the stock’s rapid ascent, Wall Street largely continues to view Nvidia as the clearest large-scale beneficiary of the ongoing AI expansion cycle.
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