Nvidia shares retreated in premarket activity Monday, falling 0.9% to $183.70 as of 7:37 a.m. ET. This pullback follows a substantial 7.9% rally on Friday that closed at $185.41, with the stock trading between $174.60 and $187.00 during the prior session on volume of approximately 231 million shares.
AI Spending Scrutiny Intensifies
The reversal comes as market participants reassess the artificial intelligence investment landscape following recent earnings reports from major technology firms. Concerns have emerged regarding capital expenditure commitments for AI infrastructure, including data centers, servers, and semiconductor components. According to Reuters, Amazon, Google, Meta, and Microsoft are projected to allocate approximately $650 billion collectively as they deepen their AI initiatives.
"Friday's rebound didn't feel like the beginning of a sustainable reversal after a hectic week," noted Ipek Ozkardeskaya, senior market analyst at Swissquote Bank. Market futures trended lower alongside other semiconductor names ahead of the opening bell, while traders awaited delayed economic indicators due to a partial U.S. government shutdown.
Supply Chain Developments and Earnings Focus
Industry reports from South Korea indicate Samsung Electronics plans to commence mass production of HBM4 high-bandwidth memory later this month, with shipments potentially beginning next week for integration into Nvidia's graphics processing units. Samsung has reportedly passed Nvidia's quality certification and secured purchase orders, aligning production with Nvidia's next-generation "Vera Rubin" AI accelerator roadmap.
High-bandwidth memory represents a critical, stacked component positioned near processors that can influence both supply availability and margins in advanced AI systems. Qualification and scalable shipping capabilities among suppliers remain significant factors as customers seek diversified sourcing options.
Investor attention now shifts to Nvidia's upcoming financial results, scheduled for February 25 after market close. Beyond quarterly figures, market participants will closely monitor demand commentary from cloud and data-center clients, along with any indications of supply constraints or pricing pressures as competition in AI hardware accelerates.
Macroeconomic Considerations
The broader market context introduces additional variables, with delayed January employment data expected Wednesday and consumer price index figures due Friday. Stronger-than-anticipated readings could elevate Treasury yields, potentially weighing on growth-oriented equities including semiconductor stocks even if AI demand fundamentals remain robust.
Nvidia currently exhibits characteristics of both an earnings-driven narrative and a rate-sensitive indicator. The coming week's Federal Reserve commentary and economic releases will provide important context ahead of the company's late-February earnings report.
