Nvidia (NVDA) has been in a slump for weeks, reaching concerningly low levels. The artificial intelligence (AI) leader has battled extreme volatility over the past month but failed to generate sustainable momentum.
As of this writing, shares are down more than 12% for the month and 8% for the week. Despite the momentum generated by last week’s GTC (GPU Technology Conference) 2025, market momentum still seems to be working against NVDA and many of its big tech peers.
The future may appear uncertain right now, as ongoing pressure from tariffs against Canada, Mexico, and China continues to push down entire sectors and prompt concern about a bear market.
However, a major announcement is coming soon, and it has the potential to significantly impact Nvidia and many of its peers, particularly those in the chipmaking space. The catalyst the industry needs may finally be in sight.
Nvidia and CEO Jensen Huang are facing difficult market conditions but a saving grace may be coming.
AI investors can mark their calendars for May 15
For the past few months, both investors and consumers have anxiously waited to learn more about how the Trump administration will handle AI policy. Vice President JD Vance has discussed it at multiple events but offered little direct context as to upcoming policies.
However, the White House is scheduled to release its so-called AI Diffusion Rule on May 15, described as a “regulatory framework that aims to control foreign countries’ access to high-tech chips from the US.” It will provide investors with an in-depth look at what to expect regarding AI over the next few years.
Related: JD Vance offers jolting preview of U.S. AI policy
Whenever he discusses AI policy under Trump, Vance highlights the need for less regulation. Therefore, the AI Diffusion rule will likely mean fewer rules for companies to follow, including where AI chips can be sold.
Such a decision would be in stark contrast to the AI Diffusion Rule that former President Joe Biden implemented before leaving office in January 2025. It included severe curbs on AI chip exports and garnered significant backlash from companies in the space, including Nvidia.
Wall Street seems optimistic about what this new AI policy framework will mean for Nvidia. One Bank of America BAC strategist describes the date as “liberation day,” as it will likely be the growth-driving catalyst the company needs. Per Business Insider:
“The rules would impose restrictions on some sales of Nvidia’s chips and potentially narrow its market, but the event could actually end up being positive for Nvidia stock. That’s because the company could recover from its recent slump once wider geopolitical concerns are “sized and priced,” the bank said on Thursday.”
Nvidia stock isn’t responding well to this news so far, but that’s likely because of the current AI market slump noted by Bank of America. Fellow leading AI chip stocks such as Broadcom (AVGO) and Advanced Micro Devices (AMD) have also spent the past week trending downward amid unstable market conditions.
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Bank of America’s team notes that this volatility may continue as May 15 draws closer due to rising geopolitical concerns. However, its analysts are confident that Nvidia will benefit from the new framework, maintaining a bullish $200 price target that implies 75% upside potential.
The AI rebound may be slow, but experts remain optimistic it is coming
When a booming new market like AI loses momentum, some investors will invariably speculate that a bubble is slowly starting to burst. However, the upcoming AI Diffusion Rule release could provide the sector with the catalyst it needs to start making up the ground it has lost in 2025.
Related: AI CEO issues grave warning about the future of Nvidia
With environmental curbs from Beijing’s government posing new concerns, Nvidia is facing an uphill battle with momentum working against it. But Wall Street isn’t souring on its growth prospects, despite its recent struggles. Thirty-nine out of forty-two analysts currently rate it as a Buy.
Right now, all eyes are on Nvidia as investors look to the AI leader to help pull the sector out of its slump. Investing Ed Ponsi believes that it can do just that, though.
“The tech market needs leadership,” he reports. “With Nvidia in the dumps, the Nasdaq 100 will have a difficult time regaining its mojo. But if the chipmaker can break a few technical barriers, tech stocks could resume their ascent.”
If investors can wait until May 15, or a date close to it, Nvidia may pull it off. It will likely help lead the charge as AI chipmakers shake off the current slump and capitalize off a regulatory environment that favors them.
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