Four-month largest decline! NVIDIA launched new products at CES, Jensen Huang delivered a shocking speech, why did the stock price still plummet?

NVIDIA made a stunning appearance at the Consumer Electronics Show (CES) this week, but it seems it has not impressed stock market investors, with its stock price instead posting its worst performance in four months.

On Tuesday, January 7, Eastern Time, NVIDIA's stock opened high, rising nearly 2.5% at the beginning of trading, but then fell sharply, turning negative less than half an hour after the market opened. It continued to decline, and when U.S. stocks hit a daily low near the close, it had dropped 6.3% intraday, ultimately closing down 6.2%, marking the largest single-day drop since September 3, 2024, and falling from the record closing high set on the third consecutive trading day of gains on Monday.

Prior to this, NVIDIA CEO Jensen Huang had just delivered a keynote speech at the CES conference, attended by over 6,000 people, where he launched a series of new products and technologies https://wallstreetcn.com/articles/3738537, including but not limited to the Blackwell architecture-based GPU RTX 5090, the world's smallest personal AI supercomputer Project Digits, and showcased Agentic AI with "Teat-Time Scaling" capabilities, while also ushering in a new era of "Physical AI" with the launch of the world's first foundational model for understanding the physical world, Cosmos, claiming that Physical AI will fundamentally change the $50 trillion manufacturing and logistics industries.

It seems NVIDIA brought a dazzling array of demonstrations that could have a profound revolutionary impact on some fields. So why did NVIDIA's stock plummet on Tuesday?

Some commentators believe that the latest announcements from NVIDIA provide an optimistic outlook for the company's long-term prospects, but the short-term upside potential is not as great as some investors had hoped, failing to meet investors' expectations for short-term benefits.

A report from Stifel Financial Corp. stated that the news released by NVIDIA on Monday was significant, but it is more relevant in the long run.

Other comments noted that Jensen Huang's keynote speech at CES provided relatively few details about the company's most profitable business—chips used for training and running AI models—only pointing out that its Blackwell AI processors are now in full production.

Benchmark analyst Cody Acree wrote in a report:

"Many investors were hoping for more specific progress updates on Blackwell [AI chips] and some information on the progress of the company's next-generation GPU platform Rubin."

Additionally, some evaluations stated that Jensen Huang's speech on Monday night was highly anticipated, and NVIDIA's stock performance on Tuesday resembled a classic case of "buy the rumor, sell the news," suggesting that investors should focus on the long term rather than being shortsighted

Analysts Remain Optimistic

Despite a significant drop in stock price on Tuesday, some analysts continue to be optimistic about NVIDIA's future performance following the CES presentation on Monday.

Hans Mosesmann, an analyst at Rosenblatt Securities, reiterated a buy rating on NVIDIA with a target price of $220. This target implies that he expects NVIDIA's stock price to rise more than 47% from the record closing high set on Monday.

Mosesmann stated in a report sent to clients: "Our main conclusion is that NVIDIA will continue to enhance and develop AI hardware and software products, which will help maintain its AI leadership as the market transitions to physical AI."

Benchmark analyst Acree rated NVIDIA stock as "buy," with a target price of $190, which represents a 27% increase from Monday's closing price.

Wedbush analyst Daniel Ives noted in his research report that Jensen Huang showcased how NVIDIA will expand its "massive technological lead," marking an important moment for NVIDIA to "demonstrate its strength." "After the event on Monday evening, we are more optimistic about NVIDIA's entire AI revolution."

"The market for robotics and autonomous driving technology alone represents another $1 trillion incremental market opportunity that NVIDIA can tap into over the next few years, indicating that we believe the company's market capitalization will exceed $4 trillion and could ultimately reach $5 trillion within the next 12 to 18 months," Ives wrote in his report.

Bank of America analyst Vivek Arya maintained a "preferred" buy rating on NVIDIA stock. Arya stated in a client report that NVIDIA demonstrated its "sustained AI dominance in both hardware and software, extending its influence from the cloud to enterprises and consumers."