Nvidia stock falls 1.7% despite RBC Capital initiating at Outperform with $240 target

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Nvidia stock falls

Highlights

RBC Capital initiated Nvidia with an Outperform rating and a $240 price target, highlighting strong AI demand and a massive order backlog.
Despite this bullish outlook, Nvidia shares fell 1.7% to $182.75.
Technical levels suggest consolidation, with key resistance at $212 and support near $180.

Technically, Nvidia remains in a long-term uptrend, but recent price action reflects growing consolidation. The stock is currently navigating between resistance near $210–212, a level it failed to break in multiple attempts in late December, and support around $179–181, which has held up during recent market pullbacks.

Moving averages are flattening. The 50-day moving average, now hovering around $192, has converged toward price, while the 200-day average at $165 remains well below, supporting a structurally bullish trend despite recent weakness. Momentum indicators such as the Relative Strength Index (RSI) are neutral at around 47, suggesting neither oversold nor overbought conditions. Volume has slightly decreased, indicating lower conviction among both bulls and bears in recent sessions.

Nvidia stock price dynamics (November 2025 - January 2025). Source: TradingView

From a chart pattern perspective, Nvidia is forming a broad sideways range with a mild upward bias. A breakout above $212 would signal renewed bullish strength and could lead to a retest of higher analyst targets. Conversely, a breakdown below $178 would increase downside risk, potentially opening the door to a test of the $164–165 level, where the 200-day MA may act as dynamic support.

RBC rating initiates upside case as AI tailwinds strengthen

Investor sentiment toward Nvidia received a notable boost after RBC Capital initiated coverage with an Outperform rating and a $240 price target, implying roughly 31% upside from current levels. RBC’s thesis centers on Nvidia’s unmatched positioning in the AI compute space, citing a massive $500 billion+ backlog and strong demand for AI infrastructure driven by hyperscalers and enterprise customers. The analysts particularly highlighted Nvidia’s dominance in inferencing workloads and the stickiness of its software ecosystem, which gives it a sustainable edge over competitors in the AI arms race.

This view is echoed by other major firms. Baird recently reiterated its Outperform rating and a $275 target, pointing to Nvidia’s entrenched ecosystem, high barriers to entry, and growing AI software stack. Even amid short-term volatility, Wall Street remains overwhelmingly bullish, with more than 85% of analysts maintaining Buy or Strong Buy ratings.

Despite this positive outlook, there are concerns. Macroeconomic headwinds, tightening regulatory scrutiny over advanced chip exports to China, and general tech sector volatility could pressure the stock in the short term. Yet, institutional support for Nvidia’s long-term growth narrative remains solid.

Price forecast and trading scenarios

A bullish scenario would see a break above the key resistance zone at $212, likely sparking renewed momentum, with targets at $230–240, in line with RBC’s initiation level. Continued strength in AI-related capex, along with strong quarterly earnings, could drive this breakout. Above $240, a longer-term stretch target sits at $275, aligned with Baird’s valuation outlook.

A neutral scenario suggests Nvidia may continue trading in a wide range between $180–210, consolidating recent gains while waiting for stronger earnings data or macro clarity. In this environment, traders may employ mean-reversion strategies, buying dips near $180 and selling rallies near $210, as the stock digests past gains.

Nvidia faces renewed headwinds as China quietly restricts the import and sale of its high-end H200 AI chips, limiting access to special-use cases like academic research. The move amounts to an unofficial ban, with customs agents instructed to block commercial shipments.

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