Tech juggernaut Nvidia (NASDAQ:NVDA) — which dominated the innovation ecosystem with its advanced graphics processors — finds itself in an unusual position: NVDA stock is tumbling. As of Monday afternoon, the equity is down over 5%, putting pressure on the Nvidia shareholder meeting, coming up on June 26.
Essentially, investors will be looking for management to deliver encouraging words aligned with the forward vision of AI. Previously, NVDA stock roared higher as the underlying processors powered the most intensive artificial intelligence-based protocols. Further, an increasing number of corporations and government agencies have acquired Nvidia chips to develop their generative AI solutions.
At the same time, some concerns exist about the sustainability of NVDA stock. While there’s much talk about the tech juggernaut first reaching the $4 trillion market capitalization milestone, it’s now having trouble holding onto $3 trillion.
As of this writing, NVDA carries a market capitalization of around $2.95 trillion, putting it behind Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL). Below are three concerns investors will want addressed at the upcoming Nvidia shareholder meeting.
What’s in the Pipeline for NVDA Stock?
Even with the recent down sessions, NVDA stock has returned about 148% since the start of the year. In the past 52 weeks, it’s up nearly triple. Again, feeding the market with advanced processors has tremendously helped Nvidia’s success. Now, stakeholders will want to learn what the next phase will encompass.
It’s possible that Nvidia CEO Jensen Huang will declare that the AI market is bigger than what analysts have previously predicted. For context, Bloomberg cited information that the generative AI ecosystem could become a $1.3 trillion market by 2032.
Nvidia Shareholder Meeting Should Discuss Competitive Concerns
While the framing of the overall Nvidia shareholder meeting will almost certainly be positive, shareholders will appreciate management addressing some of the key competitive concerns that have risen. In particular, market experts have previously noted that Nvidia is dependent on a select few enterprises.
A mystery customer — which UBS analysts speculate is Microsoft — has contributed 19% of Nvidia’s revenue in fiscal 2024. So far, NVDA stock has been no worse for wear. Nevertheless, Wednesday’s Nvidia shareholder meeting represents an opportunity to ease anxieties about this dependency issue.
Peak Data Center Sales and the Need for Diversification
One of the talking points ahead of the Nvidia shareholder meeting is the rising concern of peak sales. At some point, the data centers that run various AI protocols can see demand decelerate. If so, the chipmaker will need an answer.
Huang addressing peak sales fears directly may help assuage the uneasiness of NVDA stock’s stratospheric rise. In particular, investors may become encouraged if management discusses innovations that help diversify Nvidia’s business beyond just providing hardware.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
