Nvidia stock price tests key support as AI profit-taking grows
Nvidia shares are at risk of a deeper correction as competition in the AI chip market intensifies and profit-taking spreads across the semiconductor sector.
According to Reuters, Chinese startup DeepSeek is developing its own AI chips. The company has already begun the initial testing phase of a processor that could eventually reduce its reliance on Nvidia's products. While the project remains in its early stages and poses no immediate threat to Nvidia's business, it reflects the growing trend of leading AI developers building proprietary chips to reduce dependence on external suppliers.
Another negative catalyst came from Samsung's earnings report. The company released exceptionally strong preliminary second-quarter results, reporting a 19-fold increase in operating profit. However, the announcement triggered a classic sell-the-news reaction, weighing on the broader semiconductor sector, including NVDA.
Nvidia faces a crucial test near the 200-day moving average
Nvidia shares reversed lower from the $200 resistance level, fully playing out the scenario outlined in our previous analysis.
The market's attention now turns to the 200-day simple moving average (SMA) near $191. If the stock opens the regular trading session below this level, the probability of a decline toward the next support at $185 will increase.
If buyers successfully defend $191, Nvidia is likely to rebound toward its previous resistance range between $195 and $200.
Profit-taking becomes a growing trend in AI stocks
Profit-taking following earnings releases from major technology companies is becoming an increasingly noticeable market trend. Even strong financial results are now frequently viewed as an opportunity to lock in gains after extended rallies.
If this pattern continues, the largest AI companies could face elevated volatility in the months ahead, regardless of their underlying fundamentals.
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