NVIDIA stock sinks into a bear market amid rotation from growth to value

Nvidia shares slid to their lowest level since December, falling roughly 20% from record highs as an accelerating rotation from growth to value pushed the world’s most valuable company into bear-market territory.

Similarly, Palantir stock dropped to $130 as crypto.news predicted before its earnings. 

Summary

• NVIDIA share price dropped into a bear market on Thursday.
• There are signs that investors are dumping growth stocks.
• Technical analysis points to a drop to $150.

Why is Nvidia down?

The ongoing Nvidia stock crash mirrors that of other growth companies. For example, AMD, its key competitor, tumbled to $194, down 27% from its December high.

The software sector slid into a technical bear market, with the iShares Expanded Tech-Software ETF (IGV) down more than 20% as investor anxiety around AI disruption fueled what some are calling a “SaaSpocalypse.” Fears that autonomous AI agents could replace traditional software licenses have weighed on stocks such as Palantir, which continued to sink.

Wedbush analyst Dan Ives pushed back on the pessimism, calling the selloff a “software garage sale” and arguing the market is pricing in an unrealistic doomsday scenario. Ives said enterprise software remains deeply embedded, citing data security risks and migration costs. He named Palantir, Microsoft, Snowflake, Salesforce, and CrowdStrike as long-term winners despite the recent panic.

On the other hand

Value companies are doing well, with the Vanguard Value ETF and the Schwab U.S. Dividend ETF (SCHD) rising by nearly 10% this year. They are all trading at their all-time highs. 

Nvidia stock has crashed as traders reflect on key concerns. For example, there are concerns about whether big-tech companies will continue their spending. These concerns accelerated after Microsoft’s report showed that its cloud revenue slowed in the fourth quarter. Its stock has dropped to $400, down by 27 from its all-time high. 

Therefore, there is a risk that the company and other top hyperscalers will begin to pare back their spending to please investors concerned about return on investment.

NVIDIA stock has sunk as investors remain concerned about its Chinese business. A report by the Financial Times said that the Trump administration was still conducting a review on sales of H200 chips to China. Beijing has allowed ByteDance, Tencent, and Alibaba to buy 400k chips.

At the same time, Nvidia’s biggest customers are working on their own ASIC chips. Google is working on its TPU chips, while Amazon, Microsoft, and OpenAI are hoping to launch theirs soon. This development may lead to competition and lower sales in the long-term. 

The next key catalyst for Nvidia’s stock price is its financial results, which will provide more information about its business. Analysts anticipate its revenue will come in at $67 billion, up over 50% from 2024. Its annual revenue is expected to exceed $500 billion by 2027 or 2028.

NVIDIA share price technical analysis

The daily chart shows that the NVDA share price is flashing red signals. It has formed a head-and-shoulders pattern and is now at the neckline. This is one of the most common bearish reversal sign.

It has moved below the 23.6% Fibonacci Retracement level. Also, it retreated below the 50-day moving average and the Supertrend indicator. Therefore, the most likely forecast is that it continues falling, potentially to $150, the 50% retracement level.