NVIDIA Corp. (NVDA) stock rebounded nearly 5% in Friday's premarket trading after a sharp selloff wiped more than $400 billion from its market value Thursday.
Investors are weighing whether tighter scrutiny of data-center construction could slow AI chip demand.
S&P 500 futures rose 0.5% before the opening bell, signaling a potential recovery after Thursday's market rout.
U.S. stocks lost about $3.2 trillion in market value Thursday as investors dumped technology and AI-linked shares following Democrats' sweeping midterm victory, the Financial Times reported Friday, citing FactSet data.
The Nasdaq 100 plunged 6.4%, while the S&P 500 fell 4.4%, marking its worst session since last year's "liberation day" selloff.
NVIDIA Loses Over $400 Billion in Market Value
NVIDIA shares plunged 9.3% Thursday, erasing more than $400 billion in market value.
The decline followed another semiconductor selloff last week that wiped out roughly $1 trillion in chip-sector market value.
Investors now face a key question: Will tighter data-center restrictions delay AI spending or permanently reduce demand for chips and related infrastructure?
Raymond James Sees Buying Opportunity
Raymond James Chief Investment Officer Larry Adam told CNBC Thursday that the AI investment cycle remains intact.
He said some semiconductor stocks trade at roughly 30% discounts to historical valuations despite rising earnings expectations.
Adam favors gradually rebuilding technology exposure, particularly in semiconductor infrastructure.
NVIDIA Could Face Pressure Before Big Tech
CNBC's MacKenzie Sigalos said Friday that NVIDIA could feel the impact of slower data-center construction before major cloud operators.
Fewer projects could directly reduce chip demand. However, tighter restrictions could increase the value of existing data centers and allow hyperscalers to limit spending.
Dan Ives Turns Cautious on Chips
Dan Ives of Yorkville Ives expects roughly 10% fewer data centers in his baseline forecast, with potential reductions reaching 15% to 20%.
He now expects Big Tech capital spending growth to peak in 2027 rather than 2028 or 2029.
Ives told CNBC Thursday that he prefers software over semiconductors but still sees long-term AI growth opportunities.
He highlighted Advanced Micro Devices Inc. (AMD) as a potential beneficiary.
NVIDIA Earnings Face Major Test
NVIDIA will report earnings Nov. 17. Analysts expect earnings of $2.48 per share on revenue of $109.17 billion, up from $1.30 and $57.01 billion, respectively, a year earlier.
NVIDIA holds a Buy consensus rating and an average analyst price forecast of $341.04.
Melius Research maintains a Buy rating with a $315 forecast, while Needham has a $300 forecast and Cantor Fitzgerald has a $350 forecast.
NVDA Price Action
NVDA Price Action: NVIDIA shares were up 4.11% at $189.07 during premarket trading on Friday, according to market data.
