Nvidia has temporarily fallen from grace.

Recently, all the spotlight has been taken by TSLA$Tesla(TSLA.US), while NVIDIA$NVIDIA(NVDA.US) has been quietly falling, officially entering a downtrend.

Yesterday, Alibaba's CEO Joseph Tsai expressed shock at the massive capital expenditures on AI by major U.S. tech companies, suggesting there is a bubble and excess demand.

Meanwhile, several analysts at Goldman Sachs have lowered their expectations for AI servers, stating that while computational training is a long-term trend, short-term product transitions and unclear supply-demand dynamics will result in lower-than-expected shipments. The next generation of GPUs won't complete its transition until the second half of 2025, and shipments during this period will slow down. Even when the next-gen GPUs arrive, demand for computational power remains uncertain.

This directly impacts NVIDIA. Due to slowing computational demand and product transitions, NVIDIA's performance in the first half of 2025 is unlikely to be impressive. Last week's GTC conference hinted at this—NVIDIA's stock price fell instead of rising during the event. In the short term, NVIDIA has already exhausted most of its growth narrative. At a 40x P/E ratio, NVIDIA's stock is barely acceptable, and it won't replicate last year's "buy-the-dip" myth for at least six months.

I'm not saying NVIDIA is done—its industry leadership remains unshaken, and its orders are booked until 2026. Slowing demand or bubbles won't immediately affect NVDA's performance, but they will impact market sentiment. There's no need to panic-sell or short, but expectations should be adjusted rationally to guide our next steps.$NVIDIA(NVDA.US) $GraniteShares 2x Long NVDA Daily ETF(NVDL.US) $AXS 1.5X NVDA Bear Daily ETF(NVDS.US)