Nvidia Stock Tumbles Below Key Threshold as AI Competition Heats Up Ahead of Earnings
Staff Editor Nvidia Stock Faces Volatility as It Trades Below Key Technical Level
Nvidia, the tech giant known for its graphics processing units and AI technologies, is experiencing significant stock volatility. For the first time since January 2023, the company’s shares have dipped below a crucial technical threshold, sparking concern among investors and analysts alike.
The stock has seen a sharp 16% decline, primarily attributed to investor worries over DeepSeek, a new AI model developed by a Chinese startup. This downturn resulted in a staggering $600 billion loss in market value in a single trading day, underscoring the high stakes in the competitive AI sector.
Technical analysis reveals that Nvidia’s stock fell to its 200-day moving average, a critical indicator for long-term trend direction. After closing below this average on Monday, the stock briefly recovered before falling again by Thursday. This fluctuation around the threshold suggests a pivotal moment for Nvidia’s stock performance.
Will Tamplin from Fairlead Strategies warns of potential further declines, identifying secondary support around $110. “Nvidia’s momentum is currently downward in the intermediate term, with more downside potential,” Tamplin stated. He also noted that long-term momentum has decreased since mid-2024, potentially signaling a shift to a trading range environment.
Market sentiment appears cautious, with David Keller from Sierra Alpha Research highlighting the lack of “buy the dip” activity. Keller suggests that Nvidia needs to reclaim the $130 level to restore investor confidence. Meanwhile, Ari Wald from Oppenheimer & Co. predicts a sideways consolidation phase rather than an immediate downtrend or uptrend resumption.
Wald identifies $140 as a resistance level and $100 as a support level for Nvidia stock, advising investors to adopt a “sidelines approach” until the stock resumes its uptrend.
Despite Nvidia’s struggles, Ryan Detrick from Carson Group notes that the company’s decline masks underlying strength in the broader market. “Rotation is important in a bull market,” Detrick explains, pointing to shifts from chips to sectors like transport and financials.
All eyes are now on Nvidia’s upcoming earnings report on February 26, which will be crucial for justifying its current valuation and potentially restoring investor confidence. As the tech sector continues to evolve rapidly, Nvidia’s performance remains a key indicator of market trends and investor sentiment in the AI and semiconductor industries.
