Nvidia stock jumps above $179 as memo defends its valuation and steadies investors

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Nvidia stock jumps

Highlights

- Nvidia stock rose 0.9% as the company defended its valuation in a memo addressing margin concerns tied to its new Blackwell chips.

- The stock remains in a consolidation range between $170 and $200, with strong support near $170.

- Analysts maintain bullish targets of $240–255, citing continued AI infrastructure demand and Nvidia’s ecosystem strength.

From a trend perspective, Nvidia remains well above its long-term 200-day moving average, which lies around $125, and still trades above its 50-day moving average, suggesting that the long-term uptrend remains intact. However, the failure to hold above $200 indicates profit-taking and caution among investors amid heightened valuation scrutiny.

The key resistance remains at $200–210, a level that coincides with the recent high reached during Nvidia’s earnings week. A confirmed breakout above this range would signal a continuation of the broader bullish trend. On the downside, a break below $170 could expose the stock to further correction toward $160, with lower support near $148 — levels not seen since late summer.

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

Momentum indicators such as RSI are now neutral, indicating that the stock is neither oversold nor overbought. Volume has picked up around the $175–180 range, suggesting active institutional positioning. For now, Nvidia appears to be consolidating within a $170–200 channel, with direction likely to depend on both company-specific catalysts and broader market sentiment around AI investments.

Memo response and Blackwell chip margins dominate investor focus

Investor sentiment was recently jolted by a detailed internal memo from Nvidia, in which the company defended its current market capitalization — which hovers around $4.5 trillion. The memo was a direct response to intensifying criticism from several corners of Wall Street and financial media questioning the sustainability of Nvidia’s valuation. Key points of the memo addressed misconceptions about Nvidia’s financials, while acknowledging that its latest chip architecture, Blackwell, would carry lower gross margins and higher warranty costs due to increased complexity.

Nvidia argued that such cost structures are normal for first-generation launches and would stabilize over future production cycles. Nevertheless, the acknowledgment of margin pressure sparked renewed debate around whether Nvidia’s profit model can hold up as AI competition intensifies.

At the same time, Nvidia reported robust third-quarter earnings, with total revenue surging over 60% year-over-year, driven largely by data center demand. Data center sales — now Nvidia’s largest segment — grew by over 150% year-over-year, reflecting sustained enterprise appetite for AI infrastructure. The company also issued bullish guidance for the fourth quarter, which supported the stock price after initial sell-offs.

Scenarios point to consolidation with upside toward $240 in 2026

The base case sees Nvidia trading within this zone through year-end, with any upside attempts toward $200–210 likely to meet resistance unless fueled by earnings beats or strong holiday demand for AI infrastructure. This scenario also assumes that macroeconomic conditions—such as interest rates and inflation—remain relatively stable, avoiding additional pressure on high-valuation growth stocks like Nvidia.

The bullish case assumes successful ramp-up of Blackwell, continued AI infrastructure spending from cloud providers, and minimal competitive erosion. It further anticipates that Nvidia will continue to expand its software and ecosystem offerings, such as CUDA and AI enterprise platforms, which would reinforce customer loyalty and protect against competitors' custom chips.

Bernstein reaffirmed its “Outperform” rating on Nvidia with a $275 price target, citing confidence in the company’s rebuttal of bearish claims. The firm called Nvidia’s investor memo “broadly valid” and remains optimistic about its data-center and AI infrastructure momentum.

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