Nvidia Plunges 2.9% Intraday—Can the AI Titan Rebound Before the Sector Turns?

Summary
• Nvidia shares trade at $166.39, down 2.9% from their $171.3 open amid renewed regulatory scrutiny in China.
• Sector leader AMD mirrors NVDA’s slide with a -3.19% intraday drop, signaling broad semiconductor weakness.
• Direxion Daily NVDA Bull 2X Shares (NVDU) and Roundhill NVDA WeeklyPay ETF (NVDW) both trade down 5.79% and 3.34%, respectively.
• Intraday price swung from a high of $171.35 to a low of $164.58, reflecting volatile positioning ahead of July 25 expiration. The stock’s 52-week high of $174.25 now looms as a critical psychological threshold.

Geopolitical Headwinds and Earnings Uncertainty Weigh on NVDA
Nvidia’s sharp intraday decline stems from a collision of geopolitical and market forces. While recent news of resumed H20 chip sales in China sparked a 29% YTD rally, the market is now pricing in near-term risks. The U.S.-China trade tensions remain unresolved, with export curbs still limiting China’s access to advanced AI chips. Meanwhile, anticipation of earnings from major clients like Microsoft and Amazon has triggered profit-taking, as investors question whether current valuations reflect sustainable AI demand. Short-term technical indicators suggest a bearish reversal, with RSI at 72.38 (overbought) and MACD histogram shrinking from 0.44 to 0.43, signaling waning bullish momentum.

Semiconductor Sector Under Pressure as AMD Mirrors NVDA's Slide
The semiconductor sector is broadly underperforming, with sector leader Advanced Micro Devices (AMD) down -3.197% intraday. This synchronized decline highlights sector-wide concerns about margin pressures and U.S.-China tech tensions. While AMD’s 73% year-over-year revenue growth in its data center segment mirrors Nvidia’s strength, both firms face similar headwinds from regulatory uncertainty and cooling demand in China. The sector’s 52-week low of $86.62 for NVDA contrasts sharply with its recent $174.25 peak, underscoring the fragility of current valuations.

Options and ETFs in Focus: Navigating Volatility with High-Leverage Contracts
• MACD: 7.865 (Signal Line: 7.428) — bearish divergence as histogram contracts.
• RSI: 72.38 — overbought territory, suggesting potential reversal.
• Bollinger Bands: $144.71 (Lower) to $177.30 (Upper) — price near lower band, signaling oversold potential.
• 200D MA: $132.66 (Below current price) — short-term support intact.
• Leveraged ETFs: Direxion Daily NVDA Bull 2X Shares (NVDU) and Roundhill NVDA WeeklyPay ETF (NVDW) both trade down 5.79% and 3.34%, respectively, reflecting risk-off sentiment.

Two options stand out for short-term positioning:
• NVDA20250725C167.5: Call option with 35.94% implied volatility, 87.42% leverage ratio, and 0.424 delta. Turnover of $16.18M confirms liquidity. Theta of -1.0529 suggests time decay favors long-term holders. Gamma of 0.062691 indicates sensitivity to price swings. A 5% downside to $158.07 would yield a max loss of $9.43, but this contract’s high leverage makes it ideal for aggressive bulls.
• NVDA20250725C170: Call option with 35.59% IV, 159.72% leverage ratio, and 0.277 delta. Turnover of $15.02M and theta of -0.7497 suggest strong time decay. Gamma of 0.054143 offers moderate sensitivity. A 5% drop to $158.07 would result in a $12.00 loss, but the high leverage ratio positions it for explosive upside if the stock rebounds.

Aggressive bulls may consider NVDA20250725C167.5 into a bounce above $170, while hedgers could use NVDA20250801P157.5 for downside protection. Watch for a breakout above the 200-day MA of $132.66 or a breakdown below $164.58 support.

Backtest Nvidia Stock Performance
After a -3% intraday plunge, 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 the event, with the maximum return reaching 15.54% over 30 days. This indicates that while the stock may experience a brief dip, it often rebounds and can deliver decent returns in the subsequent weeks.

Act Now: Ride the Rebound or Hedge Against Volatility?
Nvidia’s intraday plunge reflects a critical inflection point in its $166.39 price action. While the stock remains above key support levels like the 200-day MA and Bollinger lower band, the overbought RSI and shrinking MACD histogram suggest caution. Sector leader AMD’s -3.19% move underscores broader semiconductor fragility. Investors should monitor the 52-week high of $174.25 as a key resistance level—if breached, it could trigger a retest of the $171.35 intraday high. For now, position sizing and stop-loss placement are critical. Aggressive traders may target a bounce above $170, while risk-averse investors should consider NVDA20250801P157.5 for downside protection. Watch for earnings catalysts from Microsoft and Amazon to drive the next leg of the move.