Nvidia stock has been a key driver of stock gains over the last two years but is now leading the losses from a tech wipeout.
NVDA – Daily Chart
NVDA stock has found some support at the $98 level, which will be key to the next path for the stock.
Nvidia stock fell more than 6% on Monday as the “Mag Seven” stocks lost more than $650 billion.
The largest group of tech stocks has lost roughly $1.3 trillion in market cap over the last three trading sessions. Alongside a larger market sell-off, company-specific news also pressured the Magnificent Seven stocks.
On Monday, a judge said that Alphabet’s Google search businesses have violated antitrust laws. Apple was also lower after news that Berkshire Hathaway had cut half its stake in the iPhone maker.
Nvidia lost around -13%, with negative catalysts weighing on the AI chipmaker. Analysts reported the company’s upcoming next-generation AI chips would be delayed by three months, potentially impacting its largest customers, such as Microsoft, Alphabet, and Meta.
“Nvidia has a window to sell to Microsoft, Amazon, Google, and Meta while those companies are hot and bothered about building out data centers as quickly as they can. That window will shut at some point,” said Gil Luria, senior software analyst.
“If Nvidia is missing out on some of those sales during that window, that does have an impact on Nvidia’s value,” they added.
Chip stocks have been a driving force for the broader market and one of the worst-performing sectors over the last week. Intel was one of the biggest losers after a poor earnings report. Nvidia is set to release its earnings on 28 August, which will be important for the tech rally that has been going on since 2023.
“Fundamentally, NVDA remains the strongest player in the AI accelerator space,” wrote Piper Sandler’s Harsh Kumar. “We also believe that strong tailwinds from the Blackwell architecture coming in October will continue to drive revenues well into 2025 as demand exceeds supply.”
“As such, we see tremendous opportunity in NVDA stock with the price off meaningfully from highs of $140”.
