Nvidia's Stock Plunges Below Key Technical Level, Analysts Warn of Further Decline

Nvidia's stock has fallen to $167.22, breaking below its 50-day moving average of $171.02. The chipmaker's market capitalization has dropped by over $340 billion in four days. Despite this, Nvidia remains up nearly 78% from its April low and has a market value of around $4.1 trillion, making it the largest stock in the world. Analysts expect upside of over 25% from current levels.

NVIDIA Corporation (NASDAQ:NVDA) saw its stock price fall to $167.22 on September 2, 2025, breaking below its 50-day moving average of $171.02. This significant drop has led to a market capitalization reduction of over $340 billion in just four days. Despite this recent volatility, NVIDIA remains up nearly 78% from its April low and boasts a market value of around $4.1 trillion, solidifying its position as the largest stock globally. Analysts anticipate an upside of over 25% from current levels, reflecting a mix of optimism and caution in the face of recent market movements.

The recent decline can be attributed to several factors. First, the ongoing geopolitical tensions and export restrictions, particularly around China, have impacted NVIDIA's sales and profitability. While the company has managed to secure licenses for shipments to some Chinese buyers, the uncertainty surrounding these policies continues to weigh on investors. Second, the stock's correction from its 52-week high of $184.48 to the current level of $174.11 reflects short-term caution rather than structural weakness, as indicated by strong earnings and revenue growth. Third, the buildup of inventory, currently at $15 billion, poses a risk if AI demand decelerates, as past missteps have demonstrated the potential for significant margin erosion.

Despite these challenges, NVIDIA's financials remain robust. The company generated $46.7 billion in Q2 revenue, beating estimates by over $700 million, and achieved a gross margin of 72.7%. The Data Center unit, which remains the primary driver of sales, recorded a 56% year-over-year increase, while gaming and automotive sales also showed strong growth. NVIDIA's balance sheet is exceptionally strong, with $56.8 billion in cash and a debt of $10.6 billion, resulting in a current ratio of 4.21. This financial strength allows the company to pursue strategic acquisitions and shareholder returns, as evidenced by its $60 billion buyback program.

Looking ahead, analysts expect NVIDIA's EPS to rise from $4.48 in FY26 to $6.34 in FY27, implying a 41% growth rate. This growth potential supports a valuation band of $180–$210 under base assumptions, with bull scenarios placing the stock near $250 and bear cases around $140. The low short interest of 0.88% of float underscores institutional conviction in the stock despite recent volatility.

In conclusion, while NVIDIA's stock has faced a significant setback, the company's strong fundamentals and growth prospects suggest that the current price level may represent a buying opportunity. Investors should closely monitor NVIDIA's real-time chart for support levels before scaling in aggressively. The AI infrastructure cycle, estimated at $3–4 trillion over five years, continues to favor NVIDIA, making it a key player in the sector.

References:
[1] https://www.tradingnews.com/news/nvidia-stock-forecast-nasdaq-nvda-balances-174-usd