Nvidia Plummets 3.05% Amid Geopolitical Jitters and Sector-Wide Tech Selloff

Summary
• Nvidia (NVDA) trades at $170.29, down 3.05% from its previous close of $175.64
• Intraday range spans $168.80–$175.11, with 62.4M shares traded
• Morgan Stanley highlights 2.41pp underweight in institutional portfolios vs. S&P 500 weight
• Melius Research projects $9T valuation by 2030 despite current volatility
• Sector leader AMD also down 3.96%, signaling broader tech sector pressure

Nvidia's sharp intraday decline reflects a confluence of geopolitical uncertainty, sector-wide tech selloff, and institutional positioning dynamics. With the stock trading near its 200-day moving average of $137.25, investors are recalibrating expectations amid mixed signals from earnings forecasts and regulatory headwinds.

Geopolitical Risk and Earnings Uncertainty Trigger Flight to Safety
Nvidia's 3.05% intraday drop stems from three key factors: 1) Persistent geopolitical tensions over China export licenses, with Morgan Stanley noting institutional underownership despite 7.37% S&P 500 weight; 2) Sector-wide tech selloff as AMD also declines 3.96%, reflecting broader risk-off sentiment; 3) Earnings uncertainty ahead of Q2 results on August 28, with KeyBanc lowering guidance expectations. The stock's 52-week low of $86.62 remains distant, but the 30-day moving average at $175.04 suggests near-term support is eroding.

Semiconductor Sector Under Pressure as AMD Leads Tech Retreat
The semiconductor sector is experiencing broad-based weakness, with Advanced Micro Devices (AMD) down 3.96% and Intel (INTC) seeing government equity stake speculation. This aligns with broader tech sector weakness, where Microsoft and Apple also trade at multi-month lows. The sector's underperformance reflects both macroeconomic concerns and regulatory scrutiny over China exports, with SoftBank's $2B Intel investment and Trump administration's 10% stake proposal adding to uncertainty.

Bearish Positioning and Volatility Playbook for NVDA
• MACD: 4.41 (below signal line 5.59), bearish crossover
• RSI: 44.19 (oversold territory)
• Bollinger Bands: $171.21–$185.71, with price near lower band
• 200-day MA: $137.25 (far below current price)
• Implied volatility: 57.22%–67.62% across options chain

Key levels to watch: 1) 200-day MA at $137.25 as critical support; 2) $165 strike as potential short-term floor. The GraniteShares 2x Short NVDA ETF (NVD) at +6.56% offers leveraged bearish exposure. For options, two contracts stand out:

1. NVDA20250829P165 (Put Option)
• Strike: $165, Expiry: 8/29
• IV: 63.73% (high volatility)
• Delta: -0.364 (moderate sensitivity)
• Theta: -0.0517 (moderate time decay)
• Gamma: 0.0209 (strong price sensitivity)
• Turnover: $2.35M (liquid)
• Leverage: 35.87% (high reward potential)
• Payoff at 5% downside: $10.29 (max profit if price drops to $161.77)
This put option offers asymmetric risk/reward with high leverage and strong gamma to capitalize on continued volatility.

2. NVDA20250829C170 (Call Option)
• Strike: $170, Expiry: 8/29
• IV: 59.20% (moderate volatility)
• Delta: 0.525 (balanced sensitivity)
• Theta: -0.684 (high time decay)
• Gamma: 0.0239 (strong price sensitivity)
• Turnover: $4.77M (liquid)
• Leverage: 25.19% (moderate reward)
• Payoff at 5% downside: $0.00 (no profit if price drops to $161.77)
While less attractive in a bearish scenario, this call option provides directional exposure if the stock stabilizes above $170.

Aggressive bears should prioritize NVDA20250829P165 for its high leverage and volatility profile. If $165 breaks, this put option could deliver 35%+ returns on a 5% price drop.

Backtest Nvidia Stock Performance
After an intraday plunge of at least -3%, NVDA has historically shown positive short-to-medium-term gains. The backtest data reveals favorable win rates and returns for 3, 10, and 30 days following such events:1. 3-Day Performance: The win rate is 43.33%, with an average return of 1.07% over 3 days. The maximum return during this period is 6.87%, achieved on day 59.2. 10-Day Performance: The win rate increases to 40.00%, with an average return of 1.51%. The maximum return is 6.20%, recorded on day 62.3. 30-Day Performance: The win rate rises to 46.11%, with an average return of 3.72%. The maximum return is 11.25%, achieved on day 104.These results suggest that NVDA often rebounds after a significant intraday decline, making it a stock worth considering for those looking to capitalize on such market movements.

Position for Volatility as Earnings and Geopolitical Risks Converge
Nvidia's 3.05% decline reflects a perfect storm of geopolitical uncertainty, sector-wide tech weakness, and earnings uncertainty. With the stock trading near its 200-day moving average and key support at $165 in play, investors should prioritize volatility-based strategies. The sector leader AMD's 3.96% drop underscores the broader tech malaise. For those seeking directional exposure, the GraniteShares 2x Short NVDA ETF (NVD) at +6.56% offers leveraged bearish positioning. Watch for a breakdown below $165 or a rebound above $175.04 30-day MA as critical inflection points.