Nvidia Tests Critical Levels Amid China’s AI Chip Surge: Buy, Sell, or Wait?
2min read The global race for AI supremacy is intensifying, with China’s rapid advancements in semiconductor technology posing a direct challenge to Nvidia’s dominance. As reports emerge of Huawei’s new Ascend 910C chips targeting parity with Nvidia’s H100, investors are scrutinizing the tech giant’s stock, which has slumped 20% year-to-date. Is this a buying opportunity or a warning sign? Let’s dissect the technical and fundamental landscape.
China’s AI Chip Offensive: A Threat to Nvidia?
Huawei’s Ascend 910C and 910D chips, set for mass shipments in May 2025, aim to bypass U.S. export restrictions by leveraging domestic manufacturing. By integrating two 910B processors into a single package, Huawei claims performance comparable to Nvidia’s H100, while avoiding reliance on ASML’s EUV lithography. This breakthrough, produced at SMIC using older DUV technology and advanced patterning, underscores China’s resolve to achieve self-sufficiency in high-end semiconductors.
However, the economic calculus remains stark: Huawei’s process is costlier and less efficient than TSMC’s, and its chips face skepticism about yields and scalability. Meanwhile, U.S. restrictions have already halved China’s contribution to Nvidia’s revenue—from 26% in 2022 to 13% in 2025—and forced a $5.5 billion write-down on unsellable H20 chips.
Technical Analysis: A Tipping Point at $96
Nvidia’s stock is currently testing critical technical levels that could signal its near-term trajectory.
- Support Levels:
- $96: A short-term floor; a breach could trigger a slide toward $87, a multi-year psychological barrier.
Resistance Levels:
- $115: The upper boundary of a falling wedge pattern. A breakout here could propel the stock toward $130 (August 2024 high) and $136 (March 2025 target).
Moving Averages: The 50-day ($132.5) and 200-day ($132.1) averages form a “golden cross,” typically bullish. Yet their proximity suggests volatility ahead. Short-term averages (MA5 at $125.6, MA10 at $130.2) indicate consolidation within the falling wedge.
Momentum: RSI at 41.5 signals neutral momentum, while the MACD line (-1.8) hints at bearish pressure unless upward momentum accelerates.
Fundamental Crosscurrents: Risks and Opportunities
Nvidia’s strategic moves are a double-edged sword. The company is investing $500 billion with TSMC and Foxconn to shift manufacturing to the U.S., aiming to bypass export controls. Its new Blackwell chips, produced in Arizona and Texas, could secure long-term U.S. market share. CEO Jensen Huang acknowledges China’s progress but stresses innovation over trade restrictions: “This is an infinite race. Competitors like Huawei are closing the gap, but leadership hinges on staying ahead.”
Wall Street’s “Strong Buy” consensus (average target: $167.09) reflects faith in Nvidia’s AI infrastructure dominance—powering Tencent’s Selene supercomputers and China’s 200-petaflop goals. Yet geopolitical risks linger: a prolonged trade stalemate could erode its 13% China revenue further, while Huawei’s chips may undercut H100 sales.
Conclusion: Hold for the Long Game, but Mind the Risks
Nvidia’s stock faces a pivotal crossroads. On one hand, its golden cross and $167 price target ($50.52% upside from current levels) suggest long-term optimism. The company’s AI ecosystem and U.S. manufacturing pivot provide strategic resilience.
On the other hand, near-term pressures—geopolitical uncertainty, a falling wedge pattern, and a $5.5 billion write-down—argue for caution. A breakdown below $96 could trigger a bearish spiral toward $87.
The verdict? Hold for now. Technical support at $96 and the golden cross offer a safety net, while Nvidia’s AI leadership remains unmatched. However, traders should set tight stops below $96 and monitor RSI for overbought/oversold signals. For long-term investors, the $167 target—and China’s eventual need for cutting-edge AI—make this a stock to watch, not abandon.
As the saying goes: In the infinite race for AI supremacy, patience and precision are the true accelerants.
