The stock price of semiconductor giant Nvidia (NASDAQ: NVDA) has experienced significant volatility despite the company’s Q4 earnings exceeding expectations with strong revenue and earnings per share.
Although the equity has made a short-term recovery, reclaiming the $120 support zone, technical indicators suggest that NVDA is facing the threat of a sustained correction in the near future.
Notably, Nvidia ended February positively, valued at $124.80, closing the last trading session up 3.87%. However, on the weekly chart, NVDA’s share price is down almost 9%.
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Despite the positive weekly close, the stock ended below the 200-day moving average (MA), which is generally considered a bearish signal. This marks the second time NVDA has closed at this level since January 2023.
In this context, it could be a bear trap if NVDA quickly reclaims the 200-day MA. However, if it remains below, it may signal a further downside.
Nvidia stock’s ‘implosion mode’
Regarding the stock’s next trajectory, trading analyst Patrick Karim warned in an X post on February 27 that Nvidia is close to “implosion mode.”
The analyst’s chart highlighted a key technical development in Nvidia’s price action: the breakdown of its rising trend line. NVDA also fell below its 12-day and 36-day moving averages, which is historically key to maintaining bullish momentum.
Another critical factor is the volume profile, which points to weaker support below current levels. To this end, the technical outlook suggests that the Nvidia stock price might be correct and trade in the range of $90 to $95.
Nick Schmidt, co-founder of online trading learning platform TraderLion, also shared a bearish outlook in an X post on March 1, warning that Nvidia will likely see an accelerated drop. However, he expressed optimism that Nvidia might rebound after the drop, which is likely a perfect buying opportunity.
His outlook was based on technical indicators pointing to a clear downtrend, with NVDA trading below key moving averages, confirming weak momentum. The volume profile also suggests increasing selling pressure, and the absence of strong support levels could accelerate the decline to around $25.
Nvidia’s strong earnings report
Interestingly, the bearish technical outlook has emerged despite Nvidia’s strong fundamentals, which are driven by its dominance in artificial intelligence (AI) backed by blockbuster earning reports. In Q4, the technology giant’s revenue surged to $39.33 billion, fueled by its dominant AI data center business, which now makes up 91% of total sales.
Data center revenue hit $35.6 billion, up 93% year-over-year, driven by strong demand for its Hopper and next-gen Blackwell AI chips.
While growth is slowing, Q1 2025 guidance suggests 65% year-over-year growth, down from 262% last year, though the company remains confident in AI-driven demand.
At the same time, Nvidia’s aggressive $33.7 billion share buyback program reinforces the bullish outlook for the stock. In the coming quarters, investors will focus on the Blackwell chip rollout and competition from custom AI chips developed by tech giants.
NVDA’s fundamentals
On the other hand, in an X post on March 1, investment strategist Shay Boloor stressed that the stock is far from peaking despite Nvidia’s recent market movement.
He pointed out that the company’s Blackwell architecture is turbocharging AI reasoning, scaling 25 times faster than prior models, and positioning Nvidia at the heart of a compute revolution.
Boloor cited CEO Jensen Huang, who predicted AI reasoning would demand 100 more power, and Nvidia is uniquely equipped to meet this need by adopting next-generation Blackwell chips.
To sum up, Boloor’s verdict is that Nvidia’s dominance is evolving, not fading, and the market is underestimating its future.
Meanwhile, several Wall Street analysts share the same bullish outlook despite the stock’s lackluster reaction to earnings. On February 27, 2025, a day after the earnings report, the chipmaker received seven new buy ratings, reinforcing confidence in its AI-driven growth trajectory.
Among the bullish calls, Rosenblatt set a street-high price target of $220, implying a 75% upside from current levels. Other firms, including Truist, Bank of America, and Cantor Fitzgerald, reiterated their buy ratings, while D.A. Davidson maintained a hold at $135.
Amid Nvidia’s volatility, the company’s strong fundamentals and the potential of Blackwell chips reinforce its long-term growth projection. While a short-term downside is possible, Nvidia’s AI dominance keeps it a stock to watch.
Featured image via Shutterstock
