Key Stats for Nvidia Stock
- Price Change for Nvidia stock: -3%
- $NVDA Share Price as of Nov. 11: $193
- 52-Week High: $212
- $NVDA Stock Price Target: $231
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What Happened?
Nvidia (NVDA) stock dropped almost 3% on Tuesday after SoftBank disclosed it had exited its entire position in the AI chip leader, selling 32.1 million shares for $5.83 billion in October.
The Japanese conglomerate made the move as part of a broader capital-raising effort to fund its $22.5 billion investment in OpenAI and other AI ventures, including a planned acquisition of ABB’s robotics unit.
SoftBank’s CFO, Yoshimitsu Goto, emphasized that the stake sale was purely about “asset monetization” and maintaining financial flexibility for new opportunities.
A person familiar with the matter told CNBC the Nvidia exit had nothing to do with concerns about AI valuations. The company also partially sold its T-Mobile stake for $9.17 billion and took out a margin loan against its Arm holdings to raise the roughly $30.5 billion needed for recent investments.
The timing is notable, given that SoftBank is doubling down on AI through its increased stake in OpenAI, which recently reached a $ 50 billion valuation.
Following its latest $22.5 billion investment, SoftBank’s ownership in the ChatGPT maker will jump from 4% to 11%.
SoftBank remains deeply involved in AI infrastructure projects that rely on Nvidia’s technology, including the $500 billion Stargate data center project.
Meanwhile, recently, Nvidia CFO Colette Kress provided bullish commentary at Goldman Sachs’ tech conference, projecting that data center infrastructure capital requirements could reach $3 trillion to $4 trillion by the end of the decade.
She reported strong sequential growth in data center revenue, up 12% in Q2 and guiding for 17% growth in Q3, driven by continued Blackwell ramp and networking strength.
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What the Market Is Telling Us About NVDA Stock
The modest decline in Nvidia stock reflects knee-jerk concerns about a major holder liquidating rather than fundamental business worries.
Analysts quickly downplayed the significance of SoftBank’s exit.
- New Street Research noted SoftBank needed massive capital for new investments in a single quarter, “more than it has invested in aggregate over the two prior years combined.”
- Morningstar’s Dan Baker added that SoftBank explicitly stated the sale wasn’t based on any negative view of Nvidia.
This isn’t SoftBank’s first rodeo with Nvidia either. The Vision Fund previously built a $4 billion stake in 2017, before selling it all in January 2019, only to re-enter the market later.
Given SoftBank’s history of tactical trading and its current focus on becoming OpenAI’s largest outside investor, the sale appears to be driven by portfolio rebalancing rather than bearish sentiment towards AI.
The real story for Nvidia stock remains its dominant position in AI infrastructure, and Kress’s comments about $3-4 trillion in data center buildout underscore the massive runway ahead.
The company maintains its annual product cadence with Rubin on track and already seeing “gigawatts worth of needs” before launch.
Gross margins are expected to track back toward the mid-70% range by year-end as Blackwell production scales.
The potential $2-5 billion in H20 China revenue remains uncertain pending geopolitical discussions, but the core growth story doesn’t hinge on China.
With hyperscalers doubling their capital expenditures from two years ago and enterprises just beginning to adopt AI, Nvidia’s stock trajectory appears tied to execution rather than demand concerns.
SoftBank’s sale may create short-term noise, but it doesn’t change the fundamental picture.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
