Nvidia Corp. is experiencing a downturn as its shares have fallen more than two percent early Friday, following a keynote speech by CEO Jensen Huang that failed to boost investor optimism. The stock is on track to end the week down over four percent, with a year-to-date decline of 13 percent. A bearish "death cross" pattern has emerged, where the 50-day moving average falls below the 200-day average, historically signaling potential further losses. Concerns about future AI spending, particularly due to China's DeepSeek and macroeconomic uncertainties fueled by President Donald Trump's tariff threats, have contributed to the negative momentum. Despite solid fundamentals and a low price-to-earnings ratio, investors are cautious, seeking more tangible returns on investment before committing to megacap technology stocks.
The broader AI trade is also under pressure, with an index tracking major tech companies down over 15 percent this year. Nvidia's future growth, including a projected first-quarter revenue of US$43 billion, remains uncertain, and investors are wary of any signals from hyperscalers indicating a slowdown in AI spending. The lack of immediate catalysts post-GTC conference makes the macroeconomic environment crucial for Nvidia's stock performance. Analysts suggest that broader market developments, such as potential tariffs announced by Trump, could impact Nvidia's trajectory. Despite the technical warning from the death cross, some analysts believe it doesn't provide new insights into Nvidia's stock trends.
Key takeaways:
Nvidia's stock is experiencing a "death cross" pattern, indicating potential further losses.
Investors are cautious due to a lack of near-term catalysts and concerns over AI spending.
Macroeconomic factors, including potential tariffs from President Trump, are impacting investor sentiment.
Despite solid fundamentals, Nvidia's stock performance is hindered by broader market concerns.
