Nvidia faces sell-the-news risks after Micron earnings
Nvidia remains the biggest beneficiary of the AI boom, but the market is becoming increasingly demanding when it comes to the company's valuation. Even Micron's outstanding earnings demonstrated that investors may be adopting a sell-the-news strategy, locking in profits after major corporate events.
Micron's quarterly results once again confirmed that the AI infrastructure investment cycle remains exceptionally strong. The company significantly exceeded expectations for revenue, earnings, and next-quarter guidance.
However, the market's reaction was revealing. Despite the stellar report, MU shares gave back a substantial portion of their gap-up gains, dragging the broader semiconductor sector lower, including Nvidia.
Another potential headwind comes from OpenAI. The company, together with Broadcom, announced the development of a custom AI chip codenamed Jalapeño.
This could pose a longer-term challenge for Nvidia, as it may reduce OpenAI's reliance on NVDA's GPUs. More technology companies are beginning to develop their own AI chips, challenging the dominance of the world's most valuable publicly traded semiconductor company.
All eyes on Nvidia's 200 SMA
The bearish scenario we highlighted earlier is now unfolding. Nvidia has broken below the key $200 support and is approaching the next major technical level around the 200-day SMA.
The 200-day SMA, currently near $190.50, is likely to be tested in today's session.
Afterward, candlestick patterns suggest the possibility of a short-term rebound toward the previous $195–200 trading range.
However, if $190.50 fails to hold, the next major liquidity zone lies between $185 and $180. Such a scenario could unfold if profit-taking accelerates across the semiconductor sector.
Insider selling raises new questions for Nvidia
Nvidia's long-term fundamental story remains largely unchanged. Demand for AI chips continues to be exceptionally strong.
However, after years of extraordinary gains, the primary risk is no longer demand but valuation. If the sell-the-news pattern continues to repeat following earnings releases across the semiconductor industry, the sector could enter a more meaningful correction.
Another factor worth monitoring is insider selling. Since the beginning of June, Nvidia insiders have sold more than $410 million worth of shares — the highest level of insider sales since September 2025.
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