(Bloomberg) — Nvidia Corp. is currently experiencing quite a turbulent ride as market analysts are keeping a close watch on critical momentum metrics to foresee potential challenges. Over the last month, Nvidia’s stock has taken a hit, prompting traders to keep an eye on the vital 200-day moving average, a key indicator of long-term momentum that it fell below for the first time in over two years this January. Despite a slight uptick on Tuesday, Nvidia’s current position remains significantly lower than this benchmark, leaving market experts worried about the moving average’s path.
According to Todd Sohn, a senior ETF and technical strategist at Strategas Securities LLC, this represents a notable shift in Nvidia’s stock character compared to previous years. “It’s undeniably a change from Nvidia’s past performance,” Sohn said. “From a tactical standpoint, maintaining an overly positive outlook once the 200-day moving average begins to descend is challenging.”
Sohn indicates he’s closely monitoring Nvidia’s stock as it approaches $113, echoing the intraday dip it witnessed in early February. Rick Bensignor, CEO of Bensignor Investment Strategies and a former Morgan Stanley strategist, shares a similar sentiment, suggesting a further downward trend. “I suspect there’s room for more decline,” Bensignor mentioned. “Support might emerge between current levels and $110, but if it drops further, I anticipate a base around $107-$103, with the next significant support being roughly $90.”
In early trading on Wednesday, Nvidia shares fluctuated between minor gains and losses. The uncertainty surrounding Nvidia is part of a broader trend affecting major tech stocks, with the so-called Magnificent Seven group recently hitting correction status, dropping over 10% from their peak. The Nasdaq 100 Index is also inching dangerously close to a similar threshold.
Beyond Nvidia-specific concerns like DeepSeek, broader issues such as President Donald Trump’s tariffs and their impact on technology firms with Chinese exposure are causing jitters. Nvidia alone accounts for over 30% of Nasdaq’s downturn this year, with Tesla Inc. and Broadcom Inc. also hovering near their 200-day averages.
Some experts speculate Nvidia may have reached a long-term peak in stock value. “Nvidia is still the go-to for AI investments, yet debates around AI persist,” noted Buff Dormeier, chief technical analyst at Kingsview Partners. “The stock seems weary in the long-term view. The flattening 200-day trendline signals waning momentum and changes ahead.”
Currently, Nvidia’s valuation based on anticipated earnings has dipped to approximately 25, marking the lowest level the company has experienced in over a year. As the Nasdaq trades at about 22 times forward earnings with the S&P 500 Index around 20, some investors are puzzled by the pessimism surrounding Nvidia, particularly since technology leaders plan to continue significant investments in AI.
“The devaluation seems surprising, especially at the onset of a new product cycle,” noted Bernstein analysts led by Stacy Rasgon in their March 4 note, referring to Nvidia’s Blackwell chip line. “Concerns about AI hype being ‘over’ appear premature, and Nvidia’s valuation is becoming increasingly appealing.”
Despite this, experts advise caution until broader market pressures subside. “Though the stock looks enticing, trading below historical lows, investors are awaiting resolution on AI restrictions and tariff impacts on profit margins,” expressed Citigroup analysts led by Atif Malik.
In other tech news, President Donald Trump advocated for halting a $52 billion bipartisan semiconductor subsidy, a move that had previously sparked over $400 billion in investments from industry giants like Taiwan Semiconductor Manufacturing Co. and Intel Corp. Additionally, Arm Holdings Plc plans to offer chip designs to Malaysia over the next decade, boosting its semiconductor production capacity beyond chip assembly.
Meanwhile, a major battery-storage project in Finland has been approved, signaling growth in AI-related energy demands. Hon Hai Precision Industry Co. reported a 25% revenue surge in early 2025, indicative of rising AI computing needs. However, Cybereason Inc. faces internal turmoil, with its CEO stepping down amid disagreements with SoftBank Group Corp. and former US Treasury Secretary Steven Mnuchin, leading to stagnation at the financially strapped startup.
Upcoming earnings announcements feature several prominent companies like Climb Global Solutions Inc., LivePerson Inc., Methode Electronics Inc., MongoDB Inc., Yext Inc., and Zscaler Inc.—all releasing their reports soon.
(Additional stock movements added in paragraph six).
