One of the most popular semiconductor behemoths, Nvidia Corporation The NVDA has recently flashed the bearish chart amid regulatory headwinds. So, what’s next for NVIDIA investors? Do they sell their stocks, or do they believe in Nvidia’s inherent strengths and stick with it? Let’s find out.
Several chip stocks, including NVIDIA, suffered losses on Wednesday. Yesterday, the stock fell 5.7%, while the death cross pattern appeared last week. This means that NVIDIA’s short-term 50-day moving average (DMA) has dropped below its long-term 200 DMA, indicating an imminent downward trend.
NVIDIA shares were priced at $113.76 on Wednesday, while 50-DMA was priced at $127.72 below 200-DMA. NVIDIA shares faced a death cross for the last time in April 2022, and over the next six months, its shares reached 50% before its lowest point in October 2022.
Technical Indicators and Covering-NVIDIA
Image source: Zacks Investment Research
The possibility of strict regulations on NVIDIA’s bargaining chips in China hurts its share. The U.S. government’s moves exacerbated the decline due to national security reasons, adding several Chinese companies to the trade blacklist, adversely affecting NVIDIA’s sales.
Admittedly, regulators from China prevented their tech companies from purchasing NVIDIA’s H20 chips due to their energy efficiency violations. However, H20 sales are not affected because the rules are not strictly enforced and NVIDIA intends to reach an agreement with regulators to resolve the issue.
Similarly, NVIDIA has successfully explored regulatory challenges in the United States in the past and demonstrated resilience to such issues. Anyway, $100 is a strong support level for NVIDIA stock. If it breaks through this, it may mark a long-term downward trend. NVIDIA previously tested this level in August and September, rebounding to only $150 ever.
In fact, the crazy demand for NVIDIA’s next-generation cutting-edge Blackwell chips and the dominance of the graphics processing unit (GPU) market will drive its stock price to rise. 7 magnificent stocks, e.g. Alphabet Inc. Google and Microsoft Corporation MSFT chose Blackwell chips due to its solid energy efficiency level and faster AI interface.
With over 80% market share in discrete GPU space, NVIDIA has a competitive advantage, and its CUDA software platform continues to gain prominence among developers Advanced Micro Devices, Inc. It is the AMD ROCM software platform.
Despite current price volatility, NVIDIA remains a financially strong company. Its revenue climbed 114% to $130 billion in fiscal 2025 (end in January), and sales are expected to rise 65% in the first quarter.
