Nvidia Stock Caught Between a China Void and a Memory-Chip Surge

Nvidia stock drops 7% as investors shift to memory chips and China market collapses due to import ban. Despite record revenue, technicals weaken; analysts remain bullish.

Investors are punishing Nvidia on two fronts. The stock closed Friday at €168.80, shedding roughly 2% on the day and more than 7% over the week — its worst stretch in over a year. The slide comes as a powerful rotation drains capital from AI-accelerator plays and funnels it into memory-chip makers, a trend analysts expect to persist into 2028 as each new Nvidia GPU generation demands more storage capacity. Rivals like Micron are the immediate beneficiaries, and the market is pricing in a shift that dims Nvidia’s perceived dominance.

That dominance is already under siege in China, once one of the chipmaker’s fastest-growing markets. Before the US tightened export controls, Nvidia commanded roughly 95% of the advanced-chip market there. That share has now collapsed to effectively zero. The mechanism is as frustrating as it is structural: Washington has authorised the export of the H200 chip, but Beijing refuses to grant import permits. The result is a geopolitical dead end that CEO diplomacy has failed to unlock.

The vacuum is not staying empty. Huawei is rushing in, projecting AI-chip revenue of $12bn for 2026 — up sharply from a previous estimate of $7.5bn a year earlier. Chinese AI platforms are now being forced to build on Huawei’s technology, and domestic alternatives such as the Ascend 910C and the 950PR chip used by Chinese AI firm DeepSeek have proven viable for many workloads. Nvidia’s China segment, which once accounted for 13% of total revenue, appears to be written out of the company’s forecast for early 2027. The market is recalibrating to a world where one of the largest economies is building a parallel tech ecosystem.

Yet the operational picture remains strong. Nvidia posted record first-quarter revenue of $81.6bn, an 85% jump year-over-year. The next earnings print is due on August 26, and analysts are pencilling in around $92bn in sales. Morgan Stanley has reiterated an overweight rating with a price target of $288, pointing to the company’s stable 85% market share in AI accelerators. For now, the street is ignoring those buy signals entirely.

Technically, the stock looks fragile. It is now roughly 17% below its May record high and sits about 7% under its 50-day moving average, barely holding above the 200-day line. The relative-strength index reads 38.2, approaching oversold territory, but no clear buy signal has emerged. The heightened volatility means any headline from Washington or Beijing can move the price sharply. Near-term direction will depend on macro data on inflation and consumer sentiment, with the next batch of US figures due early July.

The average analyst target of roughly €262 reflects long-term confidence in the AI buildout, but it also underscores how much uncertainty is currently priced in. The bull case has always hinged on Nvidia’s indispensability — the argument that anyone serious about AI infrastructure must buy its chips. That thesis is now wobbling, at least in the world’s second-largest economy. For global investors, the August earnings report will be the next hard test of whether the fundamental story can overcome the twin drags of a lost market and a sector rotation.