Nvidia’s Ethernet Coup and Roche’s Blackwell Bet Battle a 7% Rout and China Headwinds

A brutal session on Friday erased roughly $1.2 trillion in market value across the semiconductor sector, and Nvidia was not spared. The stock closed at €168.80 in European trading, capping a weekly loss of more than 7%. That puts the shares nearly 17% below their mid‑May all‑time high. But beneath the surface, the company’s operating engine is humming.

Revenue for the first fiscal quarter of 2027 hit $81.6 billion — a sum that would have been dismissed as fantasy two years ago. The network business, once an also‑ran for Nvidia, has become a powerhouse. In the first quarter of 2026 the company grabbed a 21.5% share of the data‑centre Ethernet switch market, generating $2.1 billion from that segment alone. Total networking revenue tripled to $15 billion, propelled by ultra‑fast 800G switches. Analysts see the broader Ethernet compatibility as opening a vast new addressable market beyond traditional graphics processors.

One concrete example of rising industrial demand landed in the pharma sector. Roche, via its Genentech subsidiary, has commissioned an in‑house AI factory powered by more than 3,500 of Nvidia’s Blackwell chips. Industry estimates put the cost of the infrastructure at up to half a billion dollars. The payoff is already tangible: oncology molecule design is running 25% faster, and the company is using Nvidia’s Omniverse platform to simulate drug production digitally.

Should investors sell immediately? Or is it worth buying Nvidia?

Yet the stock remains under pressure. The US Commerce Department closed a loophole earlier this month that had allowed Nvidia’s Rubin and Blackwell chips to reach Chinese AI firms through offshore subsidiaries. The structural revenue loss from China cannot be fully offset by rising hyperscaler orders, at least in the near term. Meanwhile, the company has prioritised high‑margin AI server chips, cutting production of gaming graphics cards by as much as 30%. Supply chains stay tight.

Technically, the sell‑off has pushed the relative strength index to 38.2, signalling oversold conditions. A more bullish reading of 40.5 appeared in some analyst notes earlier in the week, but the latest dip has deepened the overshoot. The key support level is the 200‑day moving average at €163.66; if that line holds, the long‑term uptrend could reassert itself. Of 58 analysts covering the stock, the consensus remains a “Strong Buy” with a price target near $300 — implying more than 50% upside from current levels. The debate has shifted from whether demand for AI accelerators is real to how much pricing power Nvidia can retain as in‑house chips from hyperscalers and competition from Huawei begin to chip away at its dominance.