Nvidia stock drops 2.5% as SoftBank exits entire stake

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Nvidia stock drops

Highlights

- Nvidia stock dropped 2.5% to $194 following SoftBank’s sale of its entire 32.1 million-share stake worth $5.83 billion.

- The exit has heightened concerns over Nvidia’s valuation amid growing market volatility.

- Investors are now watching the $175 support level and upcoming earnings for direction.

From a technical standpoint, Nvidia is still holding above its key 50-day moving average, estimated around the $185–$190 zone. However, momentum indicators like the RSI and MACD are beginning to flatten, implying waning bullish sentiment. The stock remains well above its 200-day moving average—likely in the $160–$170 range—which indicates that the broader uptrend remains intact, but it is now at risk if bearish volume increases.

Immediate support lies at $175, which coincides with a previous resistance level turned support from August 2025. A breakdown below that could lead to a test of $150, an important psychological level and the site of the last major breakout in Q2 2025. On the upside, resistance remains firm at the $212 level, Nvidia’s recent all-time high. A clean breakout above $212 could set the stage for a move toward $230–$240, in line with some of the more aggressive analyst forecasts.

Nvidia stock price dynamics (September 2025 - November 2025). Source: TradingView

Volatility has increased, as shown by the surge in daily trade volume, which topped 175 million shares. Nvidia’s beta remains elevated at approximately 2.27, meaning the stock is likely to experience outsized moves relative to the broader S&P 500. Options activity has also spiked, with a notable rise in short-dated call and put contracts, suggesting increased hedging and speculative positioning. This heightened activity reflects growing uncertainty among traders about the stock’s near-term direction amid mixed technical signals and macro headwinds.

SoftBank stake exit raises questions on timing and valuation

The latest drop in Nvidia shares comes in the wake of news that SoftBank Group sold its entire stake—32.1 million shares—in the company during October. The total transaction raised $5.83 billion for the Japanese investment conglomerate at an average price below $182. While SoftBank characterized the move as a strategic capital reallocation to fund other AI ventures through its Vision Fund, the timing of the sale has rattled investors.

Institutional exits at or near local tops often signal profit-taking or valuation concerns. In this case, SoftBank's sale may also be read as a reflection of how richly priced Nvidia stock has become. With a trailing price-to-earnings (P/E) ratio above 56, Nvidia is trading at a significant premium to both the broader semiconductor sector and its historical average. Unless earnings growth continues to outperform expectations, the market may struggle to justify further upside in the short term.

Still, Nvidia remains the undisputed leader in AI chips, with its H100 GPUs dominating the training of large language models and data center deployments globally. Demand remains high from hyperscalers like Microsoft, Google, and Amazon. Analysts remain generally bullish, with several price targets in the $230–$250 range. However, rising geopolitical tensions, especially around U.S. export controls to China, present ongoing risks that could pressure future revenue guidance.

Technical breakout or breakdown hinges on $175–$212 range

In a bullish scenario, strong Q4 earnings—driven by rising AI chip demand—and new large-scale orders from cloud providers could propel NVDA above the $212 resistance. If that occurs, the next upside target lies in the $230–$240 range. That would imply a roughly 20% gain from current levels. Renewed analyst upgrades or expanded product launches—such as next-gen GPUs—could further accelerate investor enthusiasm and drive fresh capital inflows.

In the bearish scenario, further weakness driven by regulatory constraints or macroeconomic headwinds could push the stock below $175. A break below this level opens the door to a sharper correction toward $150, or potentially as low as $135 if sentiment worsens. Continued insider or institutional selling could compound downside pressure and shift market sentiment more decisively into risk-off territory.

Citi raised its price target for Nvidia to $720 from $650, citing strong AI infrastructure demand and expected outperformance in the upcoming earnings report. Nvidia remains a key beneficiary of generative AI growth, with its H100 and A100 GPUs leading global data center and language model workloads.

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