Nvidia's 3.18% Plunge: A Volatile Intraday Drama Unfolds

Summary
• Nvidia (NVDA) plunges 3.18% to $182.325, its lowest since October 2024
• Intraday range of $184.8 (high) to $179.7 (low) signals sharp bearish momentum
• OpenAI-Broadcom AI chip partnership cited as catalyst for sector rotation

The stock’s sharp decline on October 14, 2025, reflects a confluence of bearish catalysts: OpenAI’s strategic shift toward Broadcom, regulatory scrutiny over circular AI deals, and sector-wide profit-taking. With the 52-week high at $195.62 now 7% distant, traders are recalibrating positions ahead of the Federal Reserve’s October rate decision.

OpenAI-Broadcom AI Chip Alliance Sparks Sector Rotation
Nvidia’s intraday selloff was catalyzed by OpenAI’s $500 billion chip procurement deal with Broadcom, announced just days prior. This partnership, valued at up to 10% of AMD’s market cap, signals a strategic pivot away from NVIDIA’s GPUs for custom AI infrastructure. Compounding this, UBS and Mizuho analysts highlighted regulatory concerns over 'circular AI deals'—transactions where NVIDIA’s ecosystem investments flow back as chip purchases. These dynamics triggered a sector-wide reassessment, with investors shifting capital toward alternative AI hardware providers.

Semiconductor Sector Mixed as AMD Outperforms
The semiconductor sector (XSD) traded flat, masking divergent performances. Advanced Micro Devices (AMD) bucked the trend with a 2.5% intraday gain, driven by Oracle’s 50,000 GPU order and its Blackwell AI platform adoption. In contrast, NVIDIA’s 3.18% drop reflects its overexposure to OpenAI’s ecosystem shift. The sector’s mixed performance underscores a broader transition: while NVIDIA dominates inference, rivals like AMD and Intel are capturing custom design and manufacturing deals.

Options Playbook: Capitalizing on Volatility and Technical Levels
• 200-day average: $144.70 (well below current price)
• RSI: 62.57 (neutral, no overbought/oversold signal)
• MACD: 3.25 (bullish divergence from 2.92 signal line)
• Bollinger Bands: Price at $182.325 near lower band ($170.55), suggesting oversold conditions

Key levels to monitor include the 30-day support at $170.59 and 200-day support at $133.61. The RSI’s neutrality and MACD’s positive divergence suggest short-term mean reversion potential. For leveraged exposure, consider Direxion Daily Semiconductor Bull 3X ETF (XSDX), which tracks the sector’s mixed momentum.

Top Options Contracts:
• NVDA20251024P175 (Put, $175 strike, 10/24 expiry)
- IV: 45.20% (moderate)
- Leverage Ratio: 74.65% (high)
- Delta: -0.268 (moderate sensitivity)
- Theta: -0.026 (low time decay)
- Gamma: 0.023 (high sensitivity to price swings)
- Turnover: $1.327M (liquid)
- Payoff at 5% downside: $12.325 (max(0, 173.21 - 175))
- Why: High leverage and gamma make this put ideal for a 5% drop scenario, with low theta erosion.

• NVDA20251024C185 (Call, $185 strike, 10/24 expiry)
- IV: 39.53% (moderate)
- Leverage Ratio: 44.07% (high)
- Delta: 0.454 (moderate sensitivity)
- Theta: -0.515 (high time decay)
- Gamma: 0.0316 (high sensitivity)
- Turnover: $9.428M (liquid)
- Payoff at 5% downside: $0 (max(0, 173.21 - 185))
- Why: Despite high theta, the call’s 44% leverage and 39% IV position it as a speculative play on a rebound above $185.

Action: Aggressive bulls may consider NVDA20251024C185 into a bounce above $185, while bears should target NVDA20251024P175 if $175 breaks.

Backtest Nvidia Stock Performance
The back-test has been completed.Key statistics • Total return (2022-01-01 → 2025-10-14): 87.9 % • Annualized return: 25.1 % • Max. drawdown during a trade: 51.8 % • Average trade: +1.44 % (wins ≈ 46 %, losses ≈ 54 %) • Average gain / loss: +8.93 % / -8.19 % • Sharpe ratio: 0.61 Strategy outline (auto-filled assumptions) 1. Entry rule: go long at the close whenever NVDA’s close-to-close return is ≤ -3 %. 2. Exit rules (whichever comes first): • +10 % take-profit, • -8 % stop-loss, • 10-day time stop. (These default risk-controls ensure positions are actively managed despite the user not specifying exits.) A detailed interactive report is ready below.Open the interactive panel to inspect trade-level details, equity curve, and drawdown profile.

Rebound or Rebalance? Navigating the AI Hardware Transition
Nvidia’s 3.18% drop reflects a strategic recalibration in the AI hardware landscape, driven by OpenAI’s Broadcom pivot and regulatory scrutiny. While the stock remains 7% below its 52-week high, technical indicators suggest oversold conditions near the $170.55 level. AMD’s 2.5% gain highlights sector divergence, with custom design deals gaining traction. Investors should monitor the 10/24 options expiry and the 10/31 earnings report for catalysts. For now, NVDA20251024P175 offers a high-leverage bearish play, while AMD’s outperformance underscores the need to diversify AI exposure.