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Russian (RU) Marc Guberti
Sun, Apr 13, 2025, 11:00 AM 3 min read
The stock market has been volatile since President Donald Trump announced reciprocal tariffs. Many equities plunged upon the news but recently have recovered a bit amid Trump’s decision to pause tariffs on every country except China for 90 days.
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Nvidia (NVDA) is one of those stocks. The artificial intelligence (AI) chipmaker has produced generational returns over the past five years but is down for the year. Experts revealed the pros and cons to consider before buying Nvidia stock.
Also see the two stocks that had higher returns than Nvidia in 2024.
While tariffs are a looming concern, Stephen Callahan, a trading behavior analyst at Firstrade Securities, warned that Nvidia is losing pricing power, which can limit further gains.
“Most sell-side analysts are bullish on Nvidia and say if you have a time horizon of longer than 12 months, you should buy shares. However, besides the tariffs, one con to buying Nvidia right now is that it’s losing its strong pricing power,” he said. “It hasn’t been able to increase average selling prices. If pricing power declines going forward, that would put a ceiling on earnings upside momentum. Over the past three quarters, Nvidia’s quarterly earnings have beat analysts’ expectations by smaller amounts.”
David Capablanca, a short selling and trading expert who hosts “The Friendly Bear” podcast, said he keeps Nvidia’s long-term gains in mind when describing the recent price movement.
“2024 was a monster year for the stock — it went from around $50 to $150 — so it’s natural to see a pullback, especially with the added pressure from tariffs. In many ways, the tariffs are helping to correct the stock to more reasonable levels,” he said. “If you’re already a long-term holder, it may be tougher to manage through the volatility. But for new investors or those with cash on the sidelines, this pullback could present an opportunity to start building a position.”
He also cautioned about timing the market and attempting to find the bottom, even if Nvidia stock continues to decline in the short term.
“Nvidia has come down to around $100 and could go as low as $75. But trying to time the bottom is a dangerous game — the key is averaging [into the stock] over time if you believe in the company long term,” Capablanca said.
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