Why Nvidia Stock Lost 13% in March

Shares of Nvidia (NASDAQ: NVDA) were among the losers last month as the artificial intelligence (AI) chip leader pulled back along with the broad market in March.

There wasn't any major news that weighed on Nvidia, but signs that demand for AI infrastructure may be slowing seemed to drive the stock lower, as did general fears about a slowdown in the economy driven by weakening consumer sentiment, the uncertainty around tariffs, and declining economic growth forecasts. Toward the end of the month, the weak response to the debut of CoreWeave, a generative AI-focused cloud computing platform and a partner of Nvidia, also seemed to reflect waning investor enthusiasm for AI stocks.

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The semiconductor sector is cyclical and, given its soaring growth over the last two years, investors seem to be wary about the impact that a recession would have on Nvidia. When March came to a close, the stock finished down 13%, according to S&P Global Market Intelligence.

As you can see from the chart below, Nvidia was volatile last month, but it generally trended with the Nasdaq Composite, fluctuating according to macro-level news.

NVDA data by YCharts

Nvidia continues to pull back

Nvidia came into March reporting strong results at the end of February for the fourth quarter, but the stock pulled back on the news, a sign that investors may be moving on from the AI chip leader, and that trend continued into March.

The biggest news out of the company was its annual GTC conference, held during the third week of the month, but even CEO Jensen Huang's closely watched keynote address, which touted AI infrastructure spending across the industry reaching $1 trillion in 2028 and upcoming advances in the company's product line, failed to lift the stock. Shares of Nvidia fell 3.5% on March 18, the day of the keynote.

Toward the end of the month, the stock slumped as President Donald Trump announced auto tariffs and as the April 2 "Liberation Day" of reciprocal tariffs approached. Additionally, Nvidia seemed to jump in to help prop up CoreWeave's IPO, buying $250 million in shares at $40 to help boost investor confidence in the AI platform.

Image source: Nvidia.

What's next for Nvidia

Nvidia's pullback last month was driven by the shifting macroeconomic environment, rather than any change in the company's fundamentals so it shouldn't change any investing thesis around the stock.

In fact, the stock looks attractively priced now, trading at a forward P/E of just 25. That's a great price for a stock that looks set to continue driving the AI revolution.

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Jeremy Bowman has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.