Nvidia stock drops below $95 as tariffs and rising competition weigh on AI momentum
Nvidia's short-term outlook remains bearish.
As of April 7, 2025, Nvidia Corporation (NVDA) is trading at $94.31, reflecting a sharp 7.36% decline from the previous close.
This notable drop follows broader weakness in tech stocks and specific concerns related to Nvidia’s global exposure. Technically, the stock recently formed a bearish "death cross" pattern—where the 50-day moving average fell below the 200-day moving average. This is widely considered a signal of prolonged downside momentum.
Currently, Nvidia is hovering just above its critical support level at $90, which aligns with its 200-day moving average. A breakdown below this threshold would open the door to further losses, potentially taking the stock to its next major support zone around $85. This level also corresponds to previous consolidation zones from late 2024 and early 2025, making it a psychologically significant floor for investors.
NVDA stock price dynamics (February 2025 - April 2025). Source: TradingView.
On the resistance side, the immediate hurdle lies at $100, where sellers have repeatedly stepped in over recent weeks. Beyond that, the $110 level represents a key resistance from February 2025, where the stock faced heavy selling pressure. Relative Strength Index (RSI) readings are currently approaching oversold territory near 35, suggesting that while momentum is clearly bearish, a short-term bounce cannot be ruled out.
Market context
Nvidia's technical weakness is closely tied to growing macroeconomic and geopolitical pressures. One of the most significant recent developments is the rising U.S.-China technology conflict. The Biden administration has imposed a new wave of tariffs and export restrictions on advanced semiconductor and AI-related hardware, directly impacting Nvidia’s ability to sell high-performance chips in China, one of its major markets.
Bank of America recently issued a cautious but optimistic long-term forecast for Nvidia, acknowledging the short-term turbulence while maintaining a positive view on the company's leadership in AI and data center GPUs. However, the near-term risks are hard to ignore. Tariffs on AI hardware and broader supply chain frictions are likely to erode margins and delay product deliveries, pressuring quarterly earnings.
Moreover, competition in the AI space is intensifying. Chinese startup DeepSeek has introduced a new AI model that promises comparable performance at a fraction of the cost, raising concerns about pricing power and innovation gaps. Combined with the general pullback in risk assets due to inflation and interest rate volatility, these developments have created a challenging environment for Nvidia and its peers.
Price scenarios
Given the convergence of technical weakness and macroeconomic headwinds, Nvidia's short-term outlook remains bearish. If the $90 support level fails to hold, the next likely target is $85, followed by a potential dip toward the $80 psychological level if bearish momentum accelerates. These downside scenarios would likely be triggered by negative news around tariffs, worsening China relations, or disappointing earnings guidance.
On the flip side, a sustained rebound above the $100 mark could pave the way for a retest of the $110 resistance zone, particularly if broader market sentiment improves or Nvidia receives favorable regulatory news. However, such a rebound would require strong buying volume and a catalyst that shifts investor sentiment, such as easing trade tensions or an unexpected upside in quarterly results.
A significant overhang on Nvidia’s stock last week stemmed from newly proposed U.S. tariffs targeting strategic sectors like semiconductors. While Nvidia’s Taiwan-made AI chips were not directly affected by the 32% tariffs, fears of an escalating U.S.-China trade dispute weighed on investor sentiment due to the company’s reliance on the global semiconductor supply chain.
