Nvidia stocks dropped over 2% in the early hours of today as investors became increasingly concerned about AI spending. Investors argue that the spending that has been instrumental in the company’s growth could diminish or extend to its competitors.
The decline follows comments from Microsoft and Google that their AI expenditures will expand at a slower pace in the future.
In addition, the latest Blackwell AI servers were rumored to be overheating. This has fueled concerns about additional production delays and led to a further decline in shares.
Moreover, China’s competition regulator announced this week that it is looking into Nvidia’s $7 billion purchase of the networking technology company Mellanox. This made things even more complicated for the company.
The AI chipmaker’s shares are now down approximately 14% from their record-high closing price of $148.88 in early November.
According to reports, the competition is also intensifying. In early December, Amazon announced that it is constructing a supercomputer using its new servers and its own Trainium AI processors.
The company is optimistic that this will serve as a viable alternative to Nvidia. In its most recent earnings report, Broadcom announced that its custom AI chips, known as XPUs, will generate up to $90 billion in revenue over the next three years.
The announcement caused Broadcom’s stock price to significantly increase and Nvidia’s to decline. This is despite analyst predictions that Broadcom’s success would not be at Nvidia’s expense.
The majority of Wall Street analysts are optimistic about the stock. They predict that the company’s current quarter topline will increase by billions and by many billions more in the upcoming financial year.
They assert that the surge will be a result of the ongoing ramp of its Blackwell processors. These processors are anticipated to establish a significant market share in the AI-powered chip field.
In the fiscal year that concluded in January 2023, Nvidia reported a net income of $4.37 billion, which encompassed the launch of ChatGPT.
That figure is anticipated to increase to $102 billion by the conclusion of the upcoming fiscal year, which concludes in January 2026.
Nvidia’s stock has stayed under pressure even though the company recently reported earnings that were better than expected.
Elsewhere, Grayscale, a prominent digital asset manager, has introduced the Grayscale Horizen Trust (HZEN), which allows eligible investors to access ZEN tokens via a regulated investment product.
The decision by Grayscale to allow the Horizen Trust to be available for purchase by qualified investors comes at a time when institutional investment in cryptocurrencies has skyrocketed; this has seen some of the biggest companies make huge purchases, especially with the launch of Bitcoin Exchange-Traded Funds (ETFs).
The Horizen Trust is designed to offer investors a secure and regulated way to gain exposure to ZEN tokens. ZEN tokens are part of the Horizen blockchain platform, known for its focus on privacy and scalability. A Grayscale Horizen Trust offering ZEN tokens in the form of securities exemplifies the firm’s move toward bridging traditional finance and cryptocurrency markets.
Designed for accredited and institutional investors, the fund provides secure and compliant entry into Horizen’s blockchain ecosystem.
Grayscale is well known for its Bitcoin and ETH exchange-traded funds (ETFs), including Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE).
As of December 16, the Grayscale Horizen Trust was trading at a market price of $6.40 per share, managing approximately $8.7 million in assets.
This launch further expands Grayscale’s growing portfolio of cryptocurrency funds. Recently, the firm unveiled trusts for Lido DAO (LDO) and Optimism (OP), giving investors access to the Grayscale Lido DAO Trust and Grayscale Optimism Trust.
With these new products, customers now have access to two important Ethereum ecosystem projects for institutional investors.
In addition, Grayscale Investments recently announced the launch of the “Grayscale Chainlink Trust,” designed to give institutional investors the possibility to participate in Chainlink (LINK) through a regulated security. This trust passively invests in LINK, thus eliminating the burden of holding or managing cryptocurrency directly.
Earlier in the year, Grayscale also launched three trusts to invest in the native protocol tokens of Sky (previously MakerDAO), Bittensor, and Sui, respectively.
Grayscale’s announcement underscores the growing acceptance and integration of digital assets into mainstream investment portfolios. United States regulators are mulling permitting Grayscale Digital Large Cap Fund (GDLC), which holds a diverse portfolio of cryptocurrencies, as an ETF.