Nvidia's stock has entered troubled waters after breaching a critical technical indicator this week, following market jitters over Chinese AI startup DeepSeek's latest developments.
The semiconductor giant's shares closed at $119.70 on Thursday, falling below its 200-day moving average of $122.28 - a level closely watched by market technicians as a gauge of long-term trend strength.
The stock's inability to maintain stability above this threshold has sparked concerns among market watchers. Will Tamplin from Fairlead Strategies projects further downside risk, setting a target of $110 as the next support level. He notes that Nvidia hasn't reached oversold territory yet, suggesting more potential decline ahead.
David Keller of Sierra Alpha Research points to particularly worrying signs in the stock's behavior since early November. The absence of bargain hunters stepping in after Monday's sharp decline indicates weakening market confidence. Keller believes the stock needs to reclaim $130 to improve its technical outlook.
While some analysts anticipate continued pressure, others see a different scenario unfolding. Oppenheimer & Co's Ari Wald expects Nvidia to enter a sideways consolidation phase rather than a steep decline. This could provide time for the stock to stabilize before potentially resuming its upward trajectory.
Ryan Detrick from Carson Group offers a broader perspective, suggesting Nvidia's recent struggles might reflect natural market rotation rather than fundamental problems. He notes investors are shifting focus to sectors like transportation and financials, though emphasizes Nvidia needs strong earnings to justify its current valuation.
The stock's recent volatility highlights growing uncertainty around Nvidia's near-term prospects, as investors reassess positioning amid evolving competitive dynamics in the AI space.