Mounting economic concerns have threatened to derail the AI trade, putting Nvidia (NVDA) stock on track to have its worဣst 💝quarter since 2022.

Nvidia shares were down about 12.5% since the start of the quarter as of Wednesday's close. That would represent the stock's worst performance since the third quarter of 2022, when 澳洲幸运5官方开奖结果体彩网:inflation was running at 8.2% and the Federal Reserve projected raising interest rates another 1.5 percentage points within the next year. (Ultimately, the 澳洲幸运5官方开奖结果体彩网:central bank would lift rates even higher than forecast but, by the end of 2022, ChatGPT had sparked the AI craze that has turnedꦦ N♔vidia into one of the most important companies in the world.) 

The third quarter of 2024 is the only quarter since 2022's bear market in which Nvidia stock has fallen, and that was a modest decline below 2%. Much of that loss came in July—as Wall Street worried about 澳洲幸运5官方开奖结果体彩网:geopolitical tensions and 澳洲幸运5官方开奖结果体彩网:overspending on AI infrastructure—and early August—when one of Wall Street’s favorite 澳洲幸运5官方开奖结果体彩网:leveraged trades ♊backfired, causing a flash crash of U.S. tech s✅tocks.

Economic Uncertainty Trumps Strong AI Demand

The recent weakness in Nvidia's shares comes amid 澳洲幸运5官方开奖结果体彩网:a broader drawdown, driven by 澳洲幸运5官方开奖结果体彩网:a pivot from momentum stocks and riskier assets to safe havens. Wall Street is increasingly antsy about the economic fallout of President Donald Trump's unpredictable tariff policies. His on-again, off-again approach has created substantial uncertainty that investors worry will raise costs while 澳洲幸运5官方开奖结果体彩网:discouraging business investment, hiring, and 澳洲幸运5官方开奖结果体彩网:consumer spending. 

The economic outlook has weighed on Nvidia's stock, but most of Wall Street agrees the company's business is uniquely strong. Analysts across the board 澳洲幸运5官方开奖结果体彩网:stood by their bullish ratings on the stock after digesting CEO Jensen Huang's keynote address at 澳洲幸运5官方开奖结果体彩网:the company's annual GPU Technol𒁏ogy Conference on Tuesday. Bank of America analysts on Tuesday called Nvidia's product roadmap "unmatched," while Citi analysts said the same day that they were "reassured in NVIDIA's leadership which if anything seems to be expanding."

But after two years of market leadership, high expectations have begun to catch up with Nvidia. The company 澳洲幸运5官方开🌸奖结果体彩网:blew past quarterly earnings expectations late last month, prompting 澳洲幸运5官方开奖结果体彩网:a chorus of bullish comments from analysts. Nonetheless, 澳洲幸运5官方开奖结果体彩网:its shares tumbled more than 8% the next day and ha🐠ve yet to recover from that drop.