Nvidia’s (NVDA) stock is experiencing another downturn on Thursday, driven by macroeconomic headwinds and investor anxiety. Despite positive earnings reports that were lauded by analysts, investors remain cautious about Nvidia’s ability to maintain its stellar performance.
The stock reached a peak of $140.76 on June 20th, shortly after the stock split and ex-dividend date. However, it has been on a downward trajectory since then, exacerbated by the global market sell-off in August and concerns about the company’s future growth.
The recent second-quarter earnings report, while showing year-over-year and sequential growth in revenue and earnings, was met with some skepticism. The third-quarter revenue guidance, although positive, was viewed by some as underwhelming, marking the smallest increase relative to the consensus in recent quarters. Uncertainty surrounding the timing of Blackwell 200 shipments also contributed to the downward pressure on the stock.
Adding to the woes, soft economic data has fueled recession concerns, further impacting growth stocks like Nvidia. Reports of a Department of Justice subpoena regarding potential monopolistic practices in AI chips, although denied by Nvidia, have also fueled investor anxieties.
Despite the recent weakness, analysts remain optimistic about Nvidia’s dominance in the AI space, recommending buying the stock on dips. However, the stock is currently facing resistance at $106.5 and $115, while support levels lie around $103.6, $101.5, $100, and $95.
In premarket trading, Nvidia’s stock dropped by 0.89% to $105.26, further amplified by a weak ADP payrolls report. The future direction of the stock hinges on the resolution of macroeconomic uncertainties, the company’s ability to sustain its AI growth, and the outcome of any potential antitrust investigations.
