Nvidia stock steady at $117 despite high volatility in tech sector
Nvidia is making strategic moves to expand its portfolio
As of May 12, Nvidia stock is trading at $116.65, down 0.6% in the past 24 hours. Nvidia (NASDAQ: NVDA) has been experiencing increased volatility in recent weeks, driven by both technical indicators and broader market conditions.
Nvidia’s current price movement shows a consistent pattern of lower highs and lower lows, forming a falling wedge that typically precedes an upward breakout. The upper boundary of this wedge is situated around the $115 resistance level, while the lower boundary is near the $96 support zone. Historically, falling wedges in Nvidia’s chart have led to subsequent rallies, but confirmation through a breakout is essential.
One of the key technical signals recently observed is the formation of a "death cross." The 50-day moving average has dipped below the 200-day moving average, a pattern often interpreted as a bearish indicator. This crossover occurred with the 50-day MA positioned at $127.39 and the 200-day MA slightly higher at $127.73. The occurrence of a death cross indicates a potential shift from bullish to bearish sentiment, suggesting that investors may want to remain cautious until clearer upward momentum is established.
NVDA stock price dynamics (March 2025 - May 2025). Source: TradingView.
Despite this bearish crossover, there are some encouraging signs from momentum indicators. The Relative Strength Index (RSI) has climbed back above the neutral 50 mark, which points to a slight increase in buying pressure. The RSI recently dipped into oversold territory before rebounding, indicating that some investors may be taking advantage of lower prices to accumulate shares. However, the overall trading volume remains subdued, suggesting a lack of strong conviction from the market.
Market context: competition, innovation, and regulatory pressures
Nvidia continues to dominate the AI and GPU markets but faces mounting challenges from both competition and geopolitical factors. Recently, there have been reports about China's Huawei Technologies advancing its AI chip development, potentially threatening Nvidia’s dominant position in high-performance computing. This development has introduced additional uncertainty for Nvidia’s future revenue growth, especially given that the Chinese market remains a significant segment for its AI hardware.
Adding to Nvidia’s challenges is the ongoing impact of U.S. government export restrictions. Nvidia has reported a $5.5 billion charge related to new requirements to obtain export licenses for its H20 AI chips destined for China. These regulatory hurdles are not only limiting Nvidia’s access to a lucrative market but also raising concerns about the sustainability of its AI revenue growth.
In contrast to these headwinds, Nvidia is making strategic moves to expand its portfolio. The company has recently unveiled its Blackwell and Rubin AI chips, which are positioned as next-generation solutions for advanced computing. Additionally, a new partnership with General Motors aims to enhance AI-driven manufacturing processes, reflecting Nvidia’s continued innovation despite external pressures.
Navigating the wedge with caution
In the short term, Nvidia's stock is likely to remain range-bound between $96 and $130. The falling wedge pattern suggests that a breakout above $130 could trigger a bullish move, with the potential to reach $150 if volume supports the upward shift. However, given the recent death cross and subdued trading volumes, a false breakout cannot be ruled out.
On the downside, if the stock breaks below the $96 support level, it could spark a deeper correction. The next key support to watch would be around $87, a level that coincides with previous consolidation phases. Investors should be mindful of Nvidia’s technical indicators, as any further decline in RSI or continued trading below the 200-day moving average would confirm bearish sentiment.
Nvidia is facing rising competition in the AI sector as China's Huawei develops its own AI chips, challenging Nvidia’s dominance. This, alongside China’s push for semiconductor self-sufficiency, threatens to reduce Nvidia's market share.
