Is Nvidia Stock Still a Buy Amid Increased Competition & China Headwinds

Core Insights - Nvidia's stock has recently declined by 4% from its 52-week peak of $184, influenced by an antitrust probe in China and competition from Broadcom [1][2] - OpenAI is increasing competitive pressure on Nvidia by developing its own AI chip in collaboration with Broadcom, which may challenge Nvidia's market dominance [3][4][5] - Nvidia's revenue from China has been volatile, with significant losses anticipated due to export bans and regulatory scrutiny, impacting future earnings potential [6][7][8] Nvidia's Competitive Landscape - OpenAI's strategic moves, including the release of "open-weight" models, aim to democratize AI access and reduce reliance on Nvidia's proprietary platforms [5] - Broadcom's custom XPU chips are gaining traction, posing a credible challenge to Nvidia's leadership in the AI chip market [2][4] Financial Performance and Projections - Nvidia generated $17 billion in revenue from China last fiscal year, accounting for 13% of global sales, but this was down from $21 billion the previous year [7] - Earnings estimates for Nvidia have improved, with projections indicating a 48% increase in FY26 and a further 39% increase in FY27, reaching $6.19 per share [9][10] - The average price target for Nvidia shares is $211.42, suggesting an 18.9% upside from current levels [13][15] Valuation Comparison - Nvidia's stock trades at a forward earnings multiple of 40X, which is more reasonable compared to Broadcom's 53X [11]