NVIDIA shares have fallen 18.5% from their 52-week high as the Magnificent Seven group underperformed broader indexes over the past six weeks. ByteDance plans to mass-produce in-house CPUs by H2 2027, creating a potential long-term demand headwind for NVIDIA’s AI accelerators in China.
NVIDIA’s shares slid 18.5% below their 52-week high since mid-May, contributing to a 13% drop across the Magnificent Seven, while the S&P 500 and Nasdaq fell about 2% over the same period. Heavy AI infrastructure spending and dwindling forward free cash flow have driven investor caution.
ByteDance’s in-house chip program aims to finalize CPU design by early 2027 and begin mass production in the second half of that year, accelerating its AI product rollout. Success would reduce reliance on external suppliers like NVIDIA, especially under tighter US export controls that limit advanced GPU access in China.
Global AI capital expenditures are projected to rise 70% to exceed $700 billion this year, straining corporate cash generation across the sector. Simultaneously, US semiconductor export restrictions on NVIDIA’s H100 and H20 accelerators pose a strategic headwind for its data-center revenue growth.
