By Adam Clark

Nvidia stock was slipping early Thursday as the chip maker struggles against a downbeat mood on Wall Street.

Nvidia shares were down 1.9% at $115.00 in premarket trading. The stock rose 1.1% on Wednesday.

Nvidia has only slightly rebounded from six-month lows reached earlier in the week in the wake of the Trump administration's imposition of levies on imports from Mexico, Canada, and China.

By its recent standards, Nvidia looks to be trading at a bargain price -- its forward price-to-earnings multiple stands at around 25 times, compared with its average of 40 times over the last five years, according to FactSet. That's despite plenty of signs of demand for artificial-intelligence hardware

However, the market doesn't look minded to chase AI plays at the moment. Fellow chip company Marvell Technology was down 16% in premarket trading on Thursday after reporting slightly better-than-expected earnings but apparently underwhelming the market by not raising its guidance.

A key specific risk the market is gauging is tariffs being placed on Taiwan, where Nvidia's chips are manufactured, as well as further curbs on exports of semiconductors to Chinese customers. That comes on top of wider concerns about the U.S. economy.

"The sharp market decline and collapse in investor sentiment are being driven by the "three-headed monster" of growth challenges, inflationary pressures, and uncertainty in [Washington] DC," wrote Mark Hackett, chief market strategist at Nationwide, in a research note.

Among other chip makers, Advanced Micro Devices was dropping 1.5% and Broadcom was falling 3.7% in premarket trading. Broadcom will report its earnings after the market closes.

Write to Adam Clark at adam.clark@barrons.com

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March 06, 2025 05:27 ET (10:27 GMT)

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