Nvidia's Sudden 2.8% Plunge: Is the AI Titan Losing Momentum?

Summary
• Nvidia (NVDA) tumbles 2.8% to $166.835, breaking below its 200-day MA of $139.12
• A lone Sell rating from Seaport’s Jay Goldberg clashes with 47 Wall Street firms’ Strong Buy
• Options frenzy: 145,701 contracts traded on 9/12 expirations, with 170-strike calls seeing $25M turnover
• Sector jitters: AMD (-5.67%) amplifies concerns over AI hardware competition and China delays

Nvidia’s sharp intraday drop has ignited a firestorm of debate. While 47 of 65 analysts still rate it a Strong Buy, Seaport’s Jay Goldberg has sounded an alarm on slowing Data Center growth and geopolitical risks. With the stock trading 2.8% below its 19-day open and RSI at 32.22 (oversold), the market is now dissecting whether this is a correction or a structural shift in AI demand.

Bearish Whispers: Data Center Growth Slows, China Delays Bite
Nvidia’s 2.8% decline stems from Seaport analyst Jay Goldberg’s bearish call, which highlighted a 6% sequential Data Center growth (its weakest since the AI boom began) and a 1% Compute revenue drop despite Blackwell GPU launches. Goldberg warned that U.S.-China trade tensions could delay shipments, giving rivals like AMD and Broadcom a foothold. Meanwhile, Wolfe Research noted the stock’s pullback was “not too surprising” after two years of consolidation post-rallies, with Blackwell production now at 1K/week but China’s $2–5B/qtr potential still on hold.

Semiconductor Sector Under Pressure: AMD’s -5.67% Drag
The semiconductor sector is broadly under pressure, with AMD (-5.67%) amplifying concerns over AI hardware competition. Broadcom’s recent earnings report, which hinted at custom AI chips challenging Nvidia’s dominance, has rattled investor sentiment. While Nvidia’s Data Center segment remains robust (26.64% annualized growth), the sector’s -3.74% average intraday drop underscores fears of margin compression as rivals scale production and China’s regulatory delays persist.

Options Playbook: Capitalizing on Volatility and Key Levels
• 200-day MA: $139.12 (below current price)
• RSI: 32.22 (oversold)
• MACD: 0.249 (below signal line 1.969)
• Bollinger Bands: Lower band at $170.04 (near current price)
• Key Support: 200D MA at $139.12; Key Resistance: 30D MA at $177.91

Top Options Contracts:
• NVDA20250912C170 (Call):
- Strike: $170 | Expiry: 9/12 | IV: 30.25% | Delta: 0.352 | Theta: -0.468 | Gamma: 0.0497 | Turnover: $25.1M
- IV: Moderate volatility | Delta: Moderate directional bias | Theta: High time decay | Gamma: Strong sensitivity to price moves
- This call stands out for its high gamma and liquidity, offering leverage if the stock rebounds above $170. A 5% downside scenario (to $158.54) would result in a $11.46 loss per contract, but its 96.42% leverage ratio amplifies upside if the stock stabilizes.

• NVDA20250912P155 (Put):
- Strike: $155 | Expiry: 9/12 | IV: 37.92% | Delta: -0.088 | Theta: -0.015 | Gamma: 0.0171 | Turnover: $1.58M
- IV: Elevated volatility | Delta: Low directional bias | Theta: Minimal time decay | Gamma: Moderate sensitivity
- This put offers a high leverage ratio (427.72%) and 52% price gain, ideal for a bearish bet. A 5% drop to $158.54 would yield a $13.54 profit per contract, though its low delta limits upside if the stock stabilizes.

Trading Setup: Aggressive bulls may consider NVDA20250912C170 into a bounce above $170. If $164.07 (intraday low) breaks, NVDA20250912P155 offers short-side potential.

Backtest Nvidia Stock Performance
Below is the completed event-study backtest for “NVDA daily close drops of ≥ 3 %” between 2022-01-01 and 2025-09-05. (We used close-to-close changes as a practical proxy for the intraday plunge; see explanation after the chart.)Key take-aways (you can explore full details in the interactive module):• 134 events were identified. • Average 1-day rebound is modest (≈ 0.25 %), and the win rate hovers near 50 %. • Through day-30, cumulative excess return turns negative versus the benchmark (NVDA underperforms by roughly 4 ppts). • No statistically significant positive edge was detected; the pattern looks like mild mean-reversion that fades.Method notes & auto-filled assumptions:1. Intraday plunge was approximated with a ≥ 3 % close-to-previous-close decline because intraday minute data are not yet available in the current tool set. 2. Default price series used: daily close. 3. Holding-period statistics were calculated for 1-30 trading days after each event. Feel free to let me know if you’d like to refine the event definition (e.g., true intraday low vs. prior close) or test alternative holding windows.

Nowhere to Hide: Key Levels and Sector Rivals Dictate Next Move
Nvidia’s 2.8% drop has exposed vulnerabilities in its AI growth narrative, with Seaport’s bearish call and AMD’s -5.67% drag amplifying sector-wide jitters. While the stock remains above its 200-day MA and RSI suggests oversold conditions, the path forward hinges on resolving China’s shipment delays and Blackwell’s production ramp. Investors should monitor the 170-strike calls for a potential rebound and the 155-strike puts for bearish exposure. With AMD (-5.67%) leading the sector’s decline, a $164.07 breakdown could trigger a broader selloff. Action: Watch for a close below $164.07 or a breakout above $170.04 to define the next phase.