Nvidia stock down 3.4% amid AI bubble fears and tech selloff

Highlights

- Nvidia delivered record earnings, driven by strong AI chip demand, particularly in the data center segment.

- Despite the results, market sentiment turned negative amid renewed concerns over excessive AI-related spending and sector overvaluation.

- Broader tech stocks sold off sharply, reflecting growing caution around the sustainability of the AI boom.

On the technical front, Nvidia remains in a well-defined uptrend, but signs of short-term exhaustion are beginning to appear. The price is significantly above its 50-day moving average (around $158) and comfortably above the 200-day moving average (near $120), indicating strong bullish momentum. However, this wide gap suggests the stock may be technically overextended.

Support is currently visible between $170 and $175, which aligns with the recent consolidation zone before the earnings breakout. This area may act as a buffer if profit-taking intensifies. Below that, stronger support lies at $160, a level that held firm during the last dip in late October. Resistance is firm near the psychological $200 level. Nvidia attempted to break above this zone intraday but failed to sustain it, making $197–$200 a near-term ceiling. A decisive breakout above $200 would likely trigger a fresh wave of buying, with technical targets pointing to $210–$215 in that scenario.

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

The Relative Strength Index (RSI) is likely in overbought territory (above 70) on shorter timeframes, increasing the probability of a pullback or range-bound action. Momentum remains on the bull’s side, but caution is warranted, especially as the stock attempts to digest recent gains.

AI rally stalls as bubble fears mount despite Nvidia blowout earnings

Despite Nvidia’s record-breaking earnings and reaffirmation of soaring demand for AI chips, broader markets reversed course on Thursday amid resurging fears of an overheated AI sector. Nvidia’s results initially ignited a relief rally, with Wall Street opening higher. However, sentiment quickly turned as investors questioned the sustainability of AI infrastructure spending, leading to a sharp sell-off in tech. The Nasdaq Composite dropped 2.2%, while the S&P 500 and Dow Jones fell 1.6% and 0.8%, respectively.

At the center of the concern is not Nvidia itself, but its biggest customers—the hyperscalers and large tech firms racing to build AI infrastructure. While Nvidia benefits directly from this capital expenditure, analysts warn that unchecked AI-related spending by these firms may not be justified by immediate returns. “You have the company that’s benefiting, but the others are still spending too much money,” said Robert Pavlik of Dakota Wealth, highlighting fears of a sector-wide imbalance between investment and profitability.

Adding to the cautious mood, Thursday’s U.S. jobs report showed solid labor market growth alongside a slight uptick in unemployment. This combination reinforced expectations that the Federal Reserve will likely hold rates steady in December. While a pause in tightening is typically positive for equities, it wasn’t enough to offset AI bubble concerns, particularly as Nvidia’s $4.4 trillion valuation underscores just how much investor optimism is priced in.

Bubble jitters trigger correction risk, but uptrend intact

In the base case, Nvidia is likely to trade in a wider, more volatile range between $160 and $195 as the market digests both its earnings and the broader macro narrative. Technical support near $170–$175 may be tested again, and only a clear break above $195–$200 would revive bullish momentum. Consolidation is now more probable, as investors seek confirmation that enterprise AI demand can justify ongoing capital expenditure.

In the bull case, a return to strength could occur if market conditions stabilize and Nvidia issues a bullish update on forward guidance in December. If broader tech sentiment recovers and AI capex concerns ease, NVDA could resume its uptrend, with upside potential toward $210. A breakout above $200 on strong volume would be the key trigger for this scenario.

Nvidia reported Q3 FY2026 revenue of $57 billion and EPS of $1.30, beating expectations as demand for AI infrastructure drove a 66% year-over-year surge in data center revenue. Strong growth across segments, including a 30% rise in gaming, and resilient margins reinforced investor confidence, pushing shares up 2.85% in aftermarket trading.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.