Nvidia shares remain under pressure, tracking a broader pullback in artificial intelligence-linked stocks.

The stock fell 1.8% in early trading on Friday, after dropping 4.2% on Thursday to its lowest close since mid-December. It is now down around 10% for the year.

The weakness reflects a shift in investor sentiment. AI-driven technology stocks, once market leaders, are losing favour.

Nvidia’s valuation has also eased. The stock now trades at a forward price-to-earnings multiple of 19.7 times, according to FactSet.

This is below the 20.3 times average for the S&P 500, despite Nvidia’s stronger growth outlook.

This marks a break from the past. Nvidia had traded at a premium to the index for over a decade.

That trend has shifted since the Iran conflict began on February 28, according to Dow Jones Market Data.

Analysts point to strong product pipeline

Despite recent declines, analysts remain positive. Wolfe Research reiterated its Outperform rating and set a $275 price target.

The optimism follows Nvidia’s GTC announcements, including Rubin Ultra “Pods” for AI data centres.

The company described these as a reference design for agentic AI systems.

Nvidia said new products—such as CPUs, storage, and Groq-related components—could add revenue equal to 50% of current VR compute rack sales.

The Groq 3 LPX rack could add another layer of growth. Nvidia estimates it offers a 25% incremental opportunity over VR200 racks.

These systems are designed for low-latency inference, enabling premium pricing.

Data centre outlook seen as conservative

At its GTC event, Nvidia projected $1 trillion in data centre revenue from its Blackwell and Rubin GPUs.

Wells Fargo analyst Aaron Rakers said this estimate may be conservative.

“We see 15%-20%+ upside to NVDA’s 2026-2027 data centre estimates,” he wrote.

Rakers, who has an Overweight rating and a $265 price target, pointed to rising demand from large cloud providers.

These firms are expected to deploy about 22 gigawatts and 25 gigawatts of AI capacity in 2026 and 2027.

Cramer remains bullish on Nvidia stock

Geopolitical tensions are also influencing markets. CNBC’s Jim Cramer said investors are thinking more like strategists than stock pickers.

“We know we can’t predict the outcome of the war. We can’t predict the timing either as tonight’s bombing pause extension shows … But what we can gauge is whether the stocks we like have much of a connection to the war,” Cramer said.

He said Nvidia’s direct exposure to the conflict is unclear.

“Nvidia is a big part of the stock market itself, and so it’s the easiest stock in the world to trade. I think it’s going down because it is so easy to get back in at a lower level.”

Interest rates are another concern. Higher rates could slow data centre investments.

“That said, if the war ends soon and we have a new Fed chief, you’ll feel like a moron for staying away from Nvidia,” Cramer said.

Cramer said the tech industry still lacks enough compute and memory capacity.

“Right now, the tech industry is short on what we call compute and its also short on memory. That means it’s short the computers that have Nvidia inside,” he said.

Higher memory costs could raise server prices and affect budgets. Still, demand for Nvidia’s products remains strong.

Cramer also downplayed energy concerns. “Nvidia’s data centres run mostly on natural gas, which is US-based and has barely budged,” he said.

He added that while risks remain, the current pullback could offer an opportunity.

“You’re ultimately being given a chance to buy a high-quality stock at a lower price than you’d normally expect,” Cramer said.

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