Analysts are now projecting a grim future for semiconductor manufacturer Nvidia’s (NASDAQ: NVDA) stock, which is facing significant sell-offs.
Although NVDA experienced substantial growth in the first half of 2024, the stock is now struggling to maintain crucial support levels and is currently facing the threat of dropping below the $100 mark.
Notably, concerns regarding the bearish outlook will likely escalate as hedge fund Elliott Management informed investors that Nvidia is in a “bubble.”
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According to the analysts, Nvidia’s rally, primarily driven by artificial intelligence (AI) technology, is “overhyped.” The firm expressed skepticism that big technology companies would continue purchasing the chipmaker’s graphics in high volumes, stating that AI is “overhyped with many applications not ready for prime time.” This skepticism is likely to dampen investor sentiment in the AI stock.
AI’s outlook for Nividia shares price
With Nvidia’s outlook appearing bleak, Finbold turned to OpenAI’s latest AI tool, ChatGPT-4o, to determine how low Nvidia might trade if the bubble projection is realized.
ChatGPT-4o’s analysis examined Nvidia’s historical performance, technical indicators, fundamental financial health, and broader market sentiment. A review of Nvidia’s past stock performance reveals behavior patterns during market corrections and periods of negative sentiment. Historically, Nvidia has shown resilience, but significant bearish calls have occasionally triggered sharp declines.
From a technical perspective, the OpenAI platform identified key support levels where Nvidia’s stock has historically attracted buying interest. Based on historical trading data, the immediate psychological support level is pegged at $100. According to the AI tool, if bearish momentum intensifies, the stock could see further losses.
However, amid this low projection, the AI tool noted that Nvidia’s robust balance sheet, consistent revenue growth, and strong profit margins provide a cushion against short-term volatility.
At the same time, ChatGPT-4o pointed out that the market’s reaction to Nvidia’s upcoming earnings reports could be pivotal in determining the stock’s direction. The report could reinforce the bullish narrative or exacerbate the bearish outlook. Any deviation from expected earnings could significantly impact the stock price.
NVDA’s share price low target
Based on the current analysis, the AI platform stated that if Nvidia’s stock continues to decline due to prevailing bearish sentiment and breaks through key support levels, the potential downside targets are as follows: $100 as an immediate psychological support level, $95 as a crucial support level informed by historical trading patterns, and $90 if the stock’s decline persists.
According to ChatGPT-4o’s analysis, considering Elliott Management’s bearish stance and the technical indicators, Nvidia’s stock could potentially find its lowest target, around $90. This projection hinges on the stock breaking through established support levels amidst negative market sentiment.
At the time of reporting, Nvidia’s losses had escalated, with the stock trading at $107, reflecting 24-hour losses of over 3%. On the weekly chart, the stock is down over 6%.
Notably, NVDA has experienced volatility in recent days. Particularly, between July 31 and August 1, the stock recorded a $600 billion swing in its market capitalization, leading to comparisons with trading like a meme stock. Meanwhile, the tech giant continues to be weighed down by shifting investor sentiment.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
