Nvidia (NASDAQ: NVDA) has enjoyed a sustained period of growth, currently trading near the upper limit of its 52-week range.
However, some experts believe the company’s exceptional gains may be nearing an inflection point, with a prominent hedge fund manager sounding the alarm over what could be a sharp reversal.
Over the past month, Nvidia’s share price has fluctuated between $126.86 and $146.54—a relatively broad range indicating market indecision. The stock now sits near the middle of this range, with visible resistance levels just above.
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Analysts point to a key support zone between $131.60 and $137.05, bolstered by several trend lines and moving averages across different timeframes.
Conversely, the resistance zone between $139.78 and $141.19 could cap any upward momentum. If the stock breaks through this level, the next significant resistance emerges between $147.64 and $148.89—a pivotal point for determining Nvidia’s near-term prospects.
Nvidia technical analysis
Recent technical indicators paint a cautionary picture. Historical precedents suggest that when Nvidia stock dipped below its 50-day moving average in October 2018, it wasn’t long before it crossed below the 200-day moving average as well.
This double breach coincided with a sharp downturn as the stock lost critical support levels. During that period, the Average Directional Index (ADX), which measures trend strength, dropped below 20, signaling a weakening bullish trend.
Simultaneously, the Chaikin Money Flow (CMF) indicator, which tracks buying versus selling pressure, dipped below zero—an ominous sign of fading investor confidence.
A glance at Nvidia’s current chart reveals unsettling parallels. Although the CMF indicator has not yet fallen below zero, it has hovered dangerously close to that threshold for the past two months. This stagnation suggests that while bulls are still in the fight, their grip on the market is tenuous. If the CMF indicator dips decisively into negative territory, it could reinforce bearish sentiment and potentially accelerate a broader sell-off.
One small reprieve for Nvidia is that, despite falling below its 50-day moving average, the stock has yet to break below its 200-day moving average.
Finbold stock market analyst Mijuško Šibalić notes the critical threshold for such a breach would be a price drop below $120. Still, the looming possibility of a significant downturn has market watchers speculating about how severe a decline could be. A drop to $54.72—a 60% crash from current levels—would align with some of the more bearish predictions circulating among industry veterans.
Veteran fund manager says Nvidia’s ‘day in the sun’ is over
Doug Kass, a seasoned hedge fund manager with an extensive track record that includes stints at Putnam and Omega Advisors, has added his voice to this pessimistic outlook.
Speaking with TheStreet Pro, Kass warned that Nvidia’s “day in the sun” is drawing to a close. He predicts that the stock price could slide dramatically to the $50–$75 range within a short period.
Kass attributes this looming correction to a phenomenon known as “double ordering” in the semiconductor industry—a practice where customers inflate their orders during times of high demand to guard against supply shortages.
The veteran fund manager argues that this behavior may have significantly inflated Nvidia’s reported revenue and profits, meaning the company’s financial performance could face a stark recalibration as those orders dry up.
Nvidia’s recent dominance in the AI and semiconductor space has undoubtedly propelled it to new heights, but this reliance on high-demand cycles and potential over-ordering practices could expose it to sharper corrections if sentiment shifts.
Featured image via Shutterstock
