Nvidia Stock Analysis: 10% Weekly Decline Driven by AI Valuation Concerns and Policy Shifts

This analysis is based on the Yahoo Finance report [1] published on November 7, 2025, which reported Nvidia’s significant decline amid AI valuation concerns.

Nvidia (NVDA) experienced a substantial 10% weekly decline from November 3-7, 2025, with shares falling from $206.88 to $186.44 [0]. The primary catalyst was White House AI and crypto czar David Sacks’ announcement that “there will be no federal bailout for AI” [1], directly responding to OpenAI CFO Sarah Friar’s comments about potentially seeking government guarantees for AI chip financing [1].

The decline reflects a broader market sentiment shift away from AI-driven exuberance, with growing comparisons to the dot-com bubble era [1]. The Technology sector underperformed significantly, declining 0.90% on November 7 [0], while other AI-related stocks including AMD and Palantir also experienced substantial declines [1].

Despite the decline, Nvidia maintains a substantial $4.54 trillion market capitalization [0]. The company’s P/E ratio of 53.12x, while elevated, remains below historical peaks near 75x [0], suggesting some valuation compression has already occurred. The Data Center segment continues to dominate revenue at 88.3% of FY2025 revenue ($115.19B) [0], indicating sustained business fundamentals.

China represents 13.1% of Nvidia’s revenue ($17.11B) [0], creating significant exposure to ongoing U.S.-China technology tensions. The combination of export restrictions and CEO Jensen Huang’s comments about China’s AI competitiveness adds another layer of uncertainty to Nvidia’s growth trajectory [1].

Notably, analyst consensus remains strongly positive with 73.4% Buy ratings and a consensus price target of $235.00, representing 26.1% upside potential [0]. Major firms including Goldman Sachs and Bank of America are maintaining Buy ratings [0], suggesting professional investors may view the current decline as a buying opportunity rather than a structural problem.

1. Valuation Correction Risk
   : At 53x P/E, Nvidia remains vulnerable to multiple compression if AI growth expectations moderate [0]
2. Geopolitical Exposure
   : China export restrictions could impact the $17.11B revenue segment [0]
3. Sector Rotation Risk
   : Growing bubble concerns may accelerate capital outflows from AI stocks [1]
4. Liquidity Concerns
   : Government shutdown effects could reduce market liquidity, disproportionately affecting high-beta tech stocks [1]

The current disconnect between negative market sentiment and positive analyst consensus may present opportunities for long-term investors. The company’s dominant market position in AI chips and sustained Data Center revenue growth [0] suggest fundamental strength remains intact despite near-term volatility.

Nvidia’s 10% weekly decline reflects a significant market reassessment of AI sector valuations following explicit government policy clarification. The stock’s current price of $186.44 [0] represents a substantial discount to analyst consensus targets of $235.00 [0], creating a divergence between market sentiment and professional analysis.

The company maintains strong business fundamentals with Data Center revenue representing 88.3% of total revenue [0], though geopolitical exposure through China operations (13.1% of revenue) [0] adds uncertainty. The Technology sector’s broader underperformance [0] suggests this is not an isolated issue but reflects sector-wide concerns about AI valuation sustainability.

Investors should monitor government policy developments, U.S.-China technology relations, and upcoming earnings guidance for Data Center growth rates as key indicators of Nvidia’s near-term trajectory.