Markets await NVIDIA’s quarterly report

Today, markets are anticipating NVIDIA’s Q4 earnings report, with expectations of over 70% year-over-year sales growth. The company, a leader in AI-focused chip production, has significantly benefited from the AI boom over the past two years, driving its stock price up over 470% and at times pushing its market capitalization beyond $3 trillion. 

Why is NVIDIA’s stock declining?

Earlier this year, NVIDIA’s stock hit an all-time high of $153.71 before starting to decline. A key factor in this downturn is the emergence of low-cost Chinese AI solutions, such as the DeepSeek AI engine, which presents a significantly cheaper alternative to models like ChatGPT. This could lead companies to reconsider their AI-related spending, potentially reducing demand for NVIDIA’s chips. 

NVIDIA stock moving without clear direction

On February 12, NVIDIA’s stock corrected from its downtrend, transitioning into sideways movement, forming a lower high and a higher low. The stock is currently trading within the $129.03 – $113.10 zone and may be heading toward its lower end.

A daily close below $113.10 could signal a resumption of the downtrend, potentially pushing prices toward $90.69. In this case, the support level at the September 6 low at $100.94 should be considered. 

Key resistance levels to watch

If NVIDIA’s stock closes above $129.03, this could encourage further buying pressure, leading the stock to test the February 18 high at $143.48. That said, the resistance zone aligned with the bullish trendline from the October 2 low at $115.1 with the 50-day simple moving average should be kept in focus.