nvidia stock faces resistance amid chip news and market rumors
Santa Clara, Tuesday, 31 December 2024.
Nvidia’s stock encountered resistance, dipping below the 50-day moving average as speculative market rumors swirled. Despite the setback, Nvidia is on track for a substantial 177% gain in 2024, following a 239% surge in 2023. The stock’s recent challenges include hitting a double-bottom base with a buy point at 146.54 and grappling with mixed news about its next-generation chip, Rubin, ahead of the CES tech conference. A significant drop was noted when Chinese AI startup DeepSeek used Nvidia’s chips, matching U.S. startups’ capabilities. Nvidia’s market cap reached $3 trillion, becoming the second most valuable company after Apple. However, the stock’s relative strength fell sharply after its all-time high of 152.89 on November 21. Market analysts indicate caution, suggesting potential trading opportunities if the stock rebounds with high volume.
Market dynamics and technical analysis
The semiconductor giant’s stock encountered significant technical hurdles as it fell below the 50-day moving average on December 30, 2024 [1]. The stock has established a new base structure with a buy point at 146.54 [1]. Market watchers are closely monitoring the recent low of 126.86, as breaking below this threshold could signal extended waiting periods for potential buyers [1]. The stock previously achieved a breakthrough at 140.76 in October, reaching its peak at 152.89 on November 21 [1].
Chinese market developments
Recent market volatility was partly triggered by developments in China. On December 9, 2024, Nvidia shares dropped 2.6% following news of an antimonopoly investigation by China’s State Administration for Market Regulation [1]. Adding to market concerns, Chinese AI startup DeepSeek’s announcement about matching U.S. capabilities using Nvidia chips created mixed sentiment among investors [1]. These events highlight the complex dynamics of Nvidia’s position in the Chinese market.
Production and strategic initiatives
In response to global trade challenges, Nvidia is strategically positioning itself through key partnerships. The company is in discussions with Taiwan Semiconductor (TSMC) to initiate production of its Blackwell chip in Arizona, a move aimed at minimizing tariff risks [1]. Analysts project robust growth for Nvidia, with sales expected to increase by 35.5% and earnings by 35.1% over the next two years [1]. The company is also expanding into AI robotics to strengthen its market position [2].
Industry expert perspectives
Market analysts maintain a cautiously optimistic outlook. UBS Global Wealth Management’s Chief Investment Officer Mark Haefele notes that Big Tech’s combined capital expenditure of $218 billion this year and projected $254 billion in 2025 supports the AI investment thesis [1]. Bernstein Research analyst Stacy Rasgon emphasizes that current market conditions don’t warrant immediate concern [1]. However, the stock’s Accumulation/Distribution Rating of D- indicates limited institutional buying pressure [1].