Nvidia's Sharp 2.78% Slide: China Uncertainty and Sector Rotation Spark Volatility

Summary
• Nvidia (NVDA) plunges 2.78% to $166.88, breaking below its 52-week low of $86.62
• Semiconductors sector sees mixed performance with AMD down 5.48%
• Options volume surges on 9/12 expirations, with 148,112 contracts traded for the 170-strike call

Today’s selloff in Nvidia marks a pivotal moment as the stock tests critical support levels amid intensifying U.S.-China trade tensions and sector-wide rotation. With the stock trading near its 200-day moving average of $139.12 and facing a $164.07 intraday low, the move reflects growing skepticism about near-term AI infrastructure demand and geopolitical risks. Analysts are now scrutinizing whether this correction signals a buying opportunity or a deeper structural shift in the AI semiconductor landscape.

China Trade Tensions and Slowing Data Center Growth Weigh on NVDA
The sharp decline in Nvidia’s stock price stems from a confluence of factors highlighted in recent analyst reports and sector dynamics. Jay Goldberg’s bearish Seaport note—flagging 6% sequential Data Center growth as the weakest since the AI boom began—has amplified investor caution. Compounding this, U.S.-China trade restrictions are delaying shipments of Blackwell GPUs, giving rivals like Cambricon and Huawei a foothold in the AI chip market. Meanwhile, the Trump administration’s 15% revenue-sharing agreement for China sales has introduced regulatory uncertainty, with Chinese regulators now demanding justifications for H20 chip purchases. These headwinds, combined with a 24% year-over-year revenue drop in China, have triggered a defensive rotation out of AI megacaps.

Semiconductor Sector Mixed as AMD Trails NVDA
The broader semiconductor sector remains fragmented, with Advanced Micro Devices (AMD) underperforming despite its 48.00% price surge on the 155-strike put. While Intel’s 10% government stake and Trump’s interventionist policies have stabilized its shares, the sector’s 0.28% daily return lags behind the S&P 500’s 0.29%. This divergence underscores investor skepticism about the sustainability of AI-driven growth narratives, particularly as Chinese firms like Cambricon report 4,348% revenue surges. The sector’s 25.22% YTD return, though robust, now faces profit-taking pressure as speculative momentum wanes.

Options Playbook: NVDA20250912P152.5 and NVDA20250912C170 Lead the Charge
• 200-day average: $139.12 (below current price)
• RSI: 32.22 (oversold)
• MACD: 0.2485 (bearish divergence)
• Bollinger Bands: $170.04 (lower band) vs. $164.07 (intraday low)

With NVDA trading near its 200-day MA and RSI in oversold territory, the stock presents a high-risk, high-reward setup. Key levels to watch include the $165 support (30D MA) and $170 resistance (middle Bollinger Band). For aggressive short-term plays, the NVDA20250912P152.5 put and NVDA20250912C170 call stand out. The put offers 642.62% leverage with 40.61% IV, while the call provides 89.83% leverage and 30.60% IV. Both contracts exhibit strong liquidity (turnover of 15.6M and 25.5M) and favorable decay profiles (theta of -0.021 and -0.486).

• NVDA20250912P152.5 (Put): Strike $152.5, Expiry 9/12, IV 40.61%, Leverage 642.62%, Delta -0.0589, Theta -0.021, Gamma 0.0117
- High leverage ratio and moderate IV position this as a speculative short-term bearish play
- Projected payoff: $152.5 - $158.54 = $6.04 per contract (5% downside scenario)

• NVDA20250912C170 (Call): Strike $170, Expiry 9/12, IV 30.60%, Leverage 89.83%, Delta 0.3671, Theta -0.486, Gamma 0.0498
- Strong gamma and liquidity make this ideal for volatility-driven rallies
- Projected payoff: $170 - $158.54 = $11.46 per contract (5% downside scenario)

Aggressive bulls may consider NVDA20250912C170 into a bounce above $165, while bears should monitor the 152.5-strike put for a breakdown below $160.

Backtest Nvidia Stock Performance
Below is an interactive module that summarises the event-study results for the days when NVIDIA (NVDA.O) suffered a ≥3 % drop in its closing price versus the previous day (used here as a practical proxy for an “-3 % intraday plunge”, because minute-level lows are not available in the current data interface). The study spans 1 Jan 2022 – 5 Sep 2025 and covers 21 qualifying events.How to read it:1. Win-rate and average excess return are shown for each holding day (1-30 days). 2. “Significant” rows highlight days where performance diverged meaningfully from the benchmark.Key observations:• Short-term (1-5 d) rebound is modest (≈2 % avg.) and statistically weak. • From day 19 onward, NVDA underperforms the benchmark with growing statistical significance, suggesting that deep daily sell-offs often presage a period of relative weakness rather than a durable bounce. Assumptions & auto-completed choices:• Because intraday lows are not supplied by the current endpoint, we substituted a ≥3 % close-to-close decline as a conservative trigger. • Holding-period window fixed at ±30 d, the platform default for event studies. • All prices use daily closes.If you’d like different thresholds, longer windows or a full trade-simulation (open & close signals) just let me know!

NVDA at Crossroads: Watch $165 Support and Sector Catalysts
Nvidia’s near-term trajectory hinges on three critical factors: the resolution of U.S.-China trade tensions, the ramp of Blackwell production, and the sector’s ability to absorb speculative profit-taking. With AMD down 5.48% and the S&P 500’s 0.29% daily return outpacing the sector, investors should prioritize liquidity and volatility management. A breakdown below $165 would validate the bearish case, while a rebound above $170 could reignite AI infrastructure optimism. For now, the NVDA20250912P152.5 and NVDA20250912C170 offer the most compelling risk/reward profiles. Watch for $165 support or a sector-wide catalyst—such as Trump’s next China policy move—to dictate the next phase.