Nvidia tests support as investors await Micron earnings
Nvidia shares remain under pressure following a recent pullback, despite continued strong demand for AI infrastructure. Investors are closely watching the broader semiconductor sector, particularly ahead of Micron's earnings report, which could serve as an important indicator of demand for memory products used in AI servers.
The primary positive factor for Nvidia remains the sustained demand for AI chips and data center infrastructure. Additional support is coming from the memory market, where companies such as Micron and SanDisk continue to benefit from expectations of shortages in DRAM and HBM memory, both of which are critical components in AI server deployments.
Micron's earnings report on June 24 will be a key event for the entire semiconductor sector. If the company delivers results below expectations, AI-related stocks could come under renewed selling pressure.
However, there is another risk that investors should consider: profit-taking following strong earnings. This is a common strategy among large hedge funds, as earnings days typically bring elevated trading volumes, allowing institutions to reduce positions without significantly impacting share prices.
Lack of fresh buyers increases downside risks
From a technical perspective, NVDA is currently testing its 50-day simple moving average (SMA) on the daily chart. If the stock opens above $210, the probability of a move toward local resistance near $217 increases.
However, the current market structure appears less convincing than during previous rallies. Average trading volume has declined by more than 40% compared with late April, suggesting weaker buying activity following the powerful advance seen over recent months.
In practice, many investors seeking exposure to the AI sector have already established positions. As a result, Nvidia is finding it increasingly difficult to attract fresh capital at current levels, while each new attempt to reach higher highs requires significantly greater buying pressure.
Against this backdrop, a short-term correction toward the $195–$200 range appears increasingly likely. This area represents the next major support zone and contains substantial liquidity from medium-term market participants.
Holding this support would preserve Nvidia's long-term bullish structure, while a breakdown could trigger a deeper correction toward the 200-day SMA near $190.
Profit-taking risks emerge across semiconductor stocks
Investors should also be aware of overheating risks in parts of the semiconductor sector.
Shares of Micron and SanDisk already appear significantly overbought after their recent rallies, increasing the likelihood of profit-taking across the industry.
For Nvidia, this creates a mixed backdrop: the long-term fundamentals of AI demand remain strong, but the sector could be vulnerable to a short-term pullback if Micron's earnings fail to meet elevated market expectations.
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