After weeks of decline, Nvidia (NASDAQ: NVDA) stock entered a modest recovery after March 10.
Despite the rally – amounting to 14.32% by the time of the latest closing bell – being dwarfed by the preceding 23.65% drop, which started after February 20, short traders were quick to show their lack of confidence it would last.
Specifically, for the first time in two weeks, NVDA shares short volume ratio exceeded 50 and stood at 52.18 on Thursday, March 13, and at 51.31 on Friday, March 14, per the data Finbold retrieved from Fintel on March 17.
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Though Nvidia stock’s 1.46% pre-market rise hints that Monday’s session might be positive for the semiconductor giant, the chipmaker’s market woes in 2025 make the short sellers’ position easy to understand.
Will Nvidia stock plunge this week?
Still, despite the fear, there is indication that the massive turbulence in U.S. equities may be over for the time being.
The drop for NVDA – but also for many other stocks and cryptocurrencies – primarily emerged as a response to President Donald Trump’s trade war escalations or technological breakthroughs arriving from China.
The East Asian factor appears to have lessened already after the initial proverbial shots were fired by the release of the DeepSeek R1 artificial intelligence (AI) model, as neither the Manus AI agent nor the ‘quantum computer’ triggered similar bloodbaths.
Though tariff news had significantly more impact, the latest round of escalatory announcements – the further increase in dues on Canadian steel being a prime example – failed to prevent the prevailing rally of late last week despite economists lowering their forecast for U.S. economic growth.
Such a setup, paired with the depth of the correction Nvidia shares already suffered – they are, even after their latest recovery, nearly 20% below their January highs – means that another bloodbath in the near term is unlikely.
NVDA stock long-term outlook
Furthermore, if Wall Street analysts are to be used as a measure, the long-term picture also appears bright. NVDA stock is overwhelmingly seen as a ‘buy,’ and, despite some price target downgrades, a 50% rally is still expected in the coming 12 months.
Still, a period of renewed volatility may come in the relatively near future as Nvidia’s first-quarter (Q1) earnings report is scheduled for May 28.
Depending on the developments in the next month and a half and the narrative that takes shape in the same time frame, NVDA shares could trade erratically either in the weeks leading up to the filing or immediately upon its release.
Lastly, as Finbold reported on March 13, Nvidia may suffer a massive price drop if the macroeconomic situation decisively moves to a recession or if the data about growth-inducing products such as Blackwell comes in weaker than expected.
Featured image via Shutterstock
