NVIDIA Stock Price at Risk of a Crash as Fresh Headwinds Emerge

Key Insights

• NVIDIA stock could be on the verge of a strong bearish breakout.
• NVIDIA AI chip sales to China have stalled because of a US security review.
• Top AI stocks like Salesforce, ServiceNow, and Adobe have tanked.

NVIDIA stock dropped for three consecutive days, reaching its lowest level since January 21st. NVDA was trading at $180, down sharply from the all-time high of $212.

This article explores top reasons why NVIDIA stock may crash soon. It faces major challenges in the coming weeks.

NVIDIA Chips Sales to China Have Stalled

NVDA stock price has crashed in the past few weeks as concerns about the company continued. One major challenge is that its H200 chip sales to China are yet to start.

A report by Financial Times said that H200 sales to China were still waiting for a review by the US government. The review is happening to prevent the chips going to companies in the military and national intelligence.

Therefore, China has allowed companies like Alibaba, ByteDance, and Tencent to buy the H200 chips. However, the report noted that these firms are yet to place orders as they wait for the review.

NVIDIA has lobbied both the US and Chinese governments to approve chip sales to China. The company believes this market could generate over $50 billion in annual revenue.

NVIDIA Stock is Facing Other Challenges

In addition to the Chinese issue, NVIDIA is facing some major challenges. For example, Microsoft’s stock price has tanked to $41 from its all-time high of $552.

Some of these losses happened last week when it published its financial results. This showed that its cloud computing business was slowing despite its massive spending on data centers.

Therefore, there is a risk that the company will start scaling down its data center spending. It’s a move that would impact NVIDIA since it is its biggest client.

At the same time, Microsoft and other top NVIDIA clients are working on their ASIC chips. This may push them to reduce their reliance on NVIDIA’s products.

For example, in a recent report, we noted that OpenAI was a bit disappointed with some NVIDIA chips. Also, it was actively looking for alternatives.

NVIDIA revenue estimates / Source: Yahoo Finance

More competition is coming from China, where companies like Huawei, MetaX, and Moore Threads are building AI chips. While NVIDIA’s Blackwell still has strong performance, these companies are making progress.

There are also some potential risks that the AI bubble is about to burst, as some of the top companies that have invested in the industry struggle. For example, top software stocks like Adobe, ServiceNow, Intuit, and Salesforce have tanked by over 50% from their all-time highs.

Meanwhile, the NVIDIA stock performance may mirror that of AMD, which published strong financial results and forward guidance. Despite this, the NVDA stock dropped by over 8% on Wednesday, a sign that the investors were expecting better results.

On the positive side, NVIDIA’s business is still growing. Analysts expect revenue growth of 63% in 2025 and 51% this year.

Technical Outlook for NVIDIA Stock

The daily timeframe chart shows that the NVIDIA stock price has crashed in the past few months, moving from a high of $212 in October last year to the current $180.

A closer look shows it is about to flip the Supertrend indicator from green to red. This signaled a change of sentiment. It has also moved below the 50-day Exponential Moving Average (EMA).

The most important risks are the small double-top pattern it has formed at $193 and the neckline at $178. It has also formed a head-and-shoulders pattern, which is a common bearish reversal sign.

Top oscillators like the Relative Strength Index (RSI) and the Percentage Price Oscillator (PPO) have started moving downwards.

NVIDIA stock price chart | Source: TradingView

Therefore, the stock will likely have a strong bearish breakout, potentially to $150, the 50% Fibonacci Retracement level. Such a move will be a 17% drop from the current level.

The bearish outlook will be invalidated if it moves above the key resistance level at $193, its highest level this year.

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