Nvidia stock edges up to $117 as U.S.-China chip tensions show signs of easing
Nvidia is dealing with broader market volatility
As of May 8, 2025, Nvidia (NASDAQ: NVDA) is trading at $116.99, reflecting a modest daily gain of 1.02%. However, the broader technical picture remains bearish.
The stock recently formed a "death cross," a technical pattern where the 50-day moving average ($127.39) has fallen below the 200-day moving average ($127.73). This formation is widely viewed as a signal of continued downside risk for the stock, often reflecting a shift in investor sentiment from bullish to bearish. The stock is currently trading below both its 50-day and 200-day moving averages, highlighting a lack of upward momentum.
Additionally, Nvidia’s price action is confined within a descending channel, a structure that generally suggests a persistent downtrend. Sellers have dominated the market, pushing prices lower with each attempt at a rebound meeting fresh selling pressure. Key support levels for Nvidia have been identified at $96 and $87. These levels are critical because a failure to maintain support at $96 could trigger a swift decline towards the next major support at $87. On the upside, resistance is visible at $115 and $130.
NVDA stock price dynamics (March 2025 - May 2025). Source: TradingView.
If Nvidia’s stock price manages to break above $115 with strong volume, it could aim for the $130 mark. However, given the bearish technical environment, any recovery might face substantial resistance. Traders should keep an eye on the Relative Strength Index (RSI), which is currently trending below 40, indicating that the stock is approaching oversold territory. While an oversold condition can sometimes trigger a short-term bounce, the broader downtrend and geopolitical risks might limit any recovery.
Market context: geopolitical tensions and competition
Nvidia's current challenges are not solely technical but are also deeply rooted in geopolitical and market dynamics. The recent decision by the United States government to impose stricter restrictions on chip exports to China has directly impacted Nvidia’s growth outlook. Nvidia, which has a significant presence in the Chinese market, is now facing a complex situation where one of its largest markets could become increasingly difficult to access.
Moreover, reports that Chinese tech giant Huawei is developing a competing AI chip have added further uncertainty for Nvidia. This development is significant because it suggests that Nvidia’s dominance in the AI chip market could be challenged not just by American competitors but also by emerging Chinese technology firms. Investors are closely watching how Nvidia plans to defend its market share amid this rising competition.
In addition to geopolitical concerns, Nvidia is dealing with broader market volatility. The technology sector has seen fluctuating valuations as investors weigh the impact of rising interest rates and slowing economic growth. Nvidia's exposure to the high-growth sectors of artificial intelligence (AI) and data centers is a double-edged sword. While these are rapidly expanding markets, they are also highly competitive, and any slowdown in demand can have an outsized impact on Nvidia’s financial performance.
NVDA price forecast: cautious outlook
Given the combination of technical weakness and external pressures, Nvidia’s stock is expected to remain under pressure in the near term. If the stock fails to hold the critical support level at $96, a decline towards the next support at $87 is possible. Such a move could be triggered by continued selling pressure, negative news around US-China relations, or further developments in the competitive landscape.
Conversely, a clear and sustained break above the $115 resistance could provide Nvidia with some upward momentum. In this scenario, the stock could aim for $130, which serves as a more significant resistance level. However, for this bullish scenario to materialize, Nvidia would likely need positive catalysts, such as favorable regulatory developments, strong earnings performance, or a strategic response to rising competition.
Nvidia’s focus on AI-driven solutions in autonomous vehicles and gaming strengthens its growth outlook. The May 28 earnings report, expected to show $0.89 EPS and $43.12 billion in revenue, could trigger a breakout above resistance.
