NVIDIA Corporation's stock faced a notable decline, driven by competitive pressures and technical challenges. Broadcom's robust earnings report underscored its growing prowess in AI processors, raising concerns about NVIDIA's competitive position in the AI chip market. This, combined with NVIDIA's stock nearing a critical support level, intensified the downward pressure. Technical analysts have pointed to a head-and-shoulders pattern, indicating a potential reversal if the $132 support level fails. Additionally, NVIDIA is grappling with legal challenges as a securities lawsuit gained momentum, further dampening investor sentiment. The market remains cautious about potential overinvestment in AI data centers, with revenue concentration from a few major customers posing a risk of market saturation.
The AXS 1.25X NVDA Bear Daily ETF (NVDS) rose 3.76% to $29.25 at 4:40 PM on Friday, December 13.