Nvidia shares fell 2.7% on news that Broadcom’s custom chips are gaining traction with hyperscalers. Despite this, Nvidia remains a strong investment in 2025, up 96% from its low in April. Concerns arise about potential competition impacting Nvidia’s pricing power and market share, with a Citi analyst suggesting a $12 billion hit to the company.

Broadcom’s success with XPUs signals a shift in buyer preference, posing a threat to Nvidia’s long-standing dominance in AI hardware. While Nvidia’s GPUs are still top for training large models, the rise of XPUs could lead to gradual erosion of market share. Analysts believe this competition could trigger volatility for Nvidia investors, despite potential upside in the Chinese market.

Despite the potential challenges, analysts still maintain a bullish outlook on Nvidia shares, with a consensus rating of “Strong Buy” and a mean target price of $212, indicating over 25% potential upside from current levels. The AI stock market is expected to benefit from robust AI spending, with potential further upside if a September rate cut occurs.

Read more at Yahoo Finance: Down 7% in the Past Month, Should You Buy the Dip in Nvidia Stock Today While You Still Can?