NVIDIA Stock Price May Crash as the Memory Shortage Persists

Key Insights

• NVIDIA stock price has retreated by 14% from its highest level in 2025.
• There are concerns about the ongoing memory shortage.
• Technical analysis suggests that the stock will continue falling, potentially to $150.

NVIDIA stock price continues to underperform the broader market this year as investors rotate from growth to value. NVDA stock was trading at $181.60, down sharply from the all-time high of $212. This retreat may continue as the ongoing memory shortage escalates.

Memory Shortage May Impact AI Investments

American and other global companies are planning to spend billions of dollars in AI infrastructure. The top four American companies have pledged to spend over $650 billion this year. The name includes Meta Platform, Amazon, Microsoft, and Google.

More companies like Oracle, CoreWeave, IREN, and Nebius are also planning to spend billions of dollars this year. All this investment will benefit NVIDIA since it makes the most advanced chips in the industry.

However, the main risk is that all these companies are facing a major challenge that has no easy solution: memory shortage.

A recent Bloomberg report noted that the memory shortage will continue in the foreseeable future as companies in the industry are struggling to boost capacity.

As a result, many of them are rising prices dramatically because of the ongoing demand and supply imbalance.

Lower US CPI data has lifted hopes for Fed easing. That optimism has spilled into equities. Memory industry leaders like Kioxia, Western Digital, Micron, and Seagate stand out as top gainers.

The ongoing memory shortage may see some data center projects being delayed. Some companies may also scale down their investments in the near term, a move that may affect NVIDIA’s demand.

Another major challenge is from China, a potentially large market for NVIDIA. It is waiting for the final approval to sell chips to some of the top companies in the country.

China has already approved some companies, like Alibaba, ByteDance, and Tencent to buy 400,000 chips from NVIDIA. It’s a move that may generate over $10 billion in revenue. It is also working on approvals for other companies in the country.

However, the Trump administration announced that Alibaba was joining the so-called entity list. They noted that it provides support to the Chinese military.

It may be difficult for Alibaba to acquire these chips. US law often prohibits American companies from providing services to firms on that list.

NVIDIA Earnings are Coming Up

The next important catalyst for the NVIDIA stock price will come out next week when the company publishes its financial results.

Wall Street analysts are highly optimistic that the company continued doing well in the fourth quarter as demand for its solutions rose.

The average estimate is that the revenue jumped by 72% in the fourth quarter. This brought its annual revenue to over $213 billion, a 56% YoY increase.

NVDA stock has always done better than estimates, a trend that may continue. Its profits are also expected to keep rising, with the earnings-per-share (EPS) rising from 89 cents to $1.59.

NVIDIA’s growth trajectory will continue in the coming years, especially if it is given the authorization to sell in China. As a result, there is a likelihood that its annual revenue this year will be $326 billion, up by 64% YoY.

NVDA Stock Price Technical Analysis

The daily timeframe chart shows that the NVDA stock price has come under pressure in the past few months. It has moved from a high of $212 in October last year to the current $180. It has moved below the 50-day Exponential Moving Average (EMA).

The stock has dropped below the Supertrend indicator, a sign that bears are in control. It also formed a head-and-shoulders pattern, a common bearish reversal sign in technical analysis.

The Relative Strength Index (RSI) and the MACD indicators have continued falling. The NVIDIA stock is likely to keep falling. It could reach the key support level at $170, which marks the neckline of the head-and-shoulders pattern.

NVDA stock price chart | Source: TradingView

A move below that level will point to more downside, potentially to the 50% Fibonacci Retracement level at $150. This is about 16% below the current level.

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