Going long on NVIDIA (NASDAQ:NVDA) has been one of the most obvious and rewarding bets this year. However, the chipmaker has sharply corrected by nearly 15% from its peak, and investors’ pain might just be beginning in their favorite AI play.
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NIVIDIA’s Catalysts
NVIDIA’s share price rallied by nearly 500% over the past three years as its top line soared from around $26.9 billion in 2022 to $60.92 billion in 2024. This performance was accompanied by the company’s EPS improving to $1.30 from $0.44 during this period. Analysts expect its financials to keep improving over the coming quarters.
NVDA Has Been Priced in by the Street
However, most of these catalysts have already been priced in by investors. Additionally, the euphoria around NVIDIA’s 10-for-1 stock split is now in the rearview mirror. While the focus now shifts to potential competitors entering NVIDIA’s territory, a bout of profit-taking was well overdue in the stock as well.
Pain Might Just Be Beginning
But the key question here is, how much more pain could be in store for investors? On Friday, NVDA’s stock price briefly tested the first support level at $125.2. Yesterday, however, the stock quickly plunged toward the next support level at $118.
If this selling pressure persists, NVDA’s stock price could be headed toward $110 before it can begin to find solid ground. Remember, investors looking to hang on to their profits and exit their long positions could quickly translate into further selling pressure in NVDA this week.
Is NVIDIA Stock Expected to Go Up or Down?
The TipRanks Technical Analysis tool is also flashing a Sell signal on the stock on the hourly timeframe. This means the next few sessions will be crucial in deciding NVDA’s next trajectory.
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