Nvidia hits 200-day EMA at $189 as valuation eases

Nvidia shares slid to $189 on Tuesday, roughly 18% below the stock’s high this year, reducing the company’s market value by nearly $1 trillion. The share price landed on the 200-day exponential moving average, a long-standing technical support level for the stock, and traced a falling-wedge pattern whose descending trendlines are nearing confluence.

Technical indicators show the relative strength index is declining and remains above the typical oversold threshold of 30. The falling-wedge pattern and the approach to the 200-day EMA are commonly referenced by traders in discussions of potential price reversals, while the RSI level leaves room for additional near-term weakness before any recovery.

On the business side, Nvidia reported first-quarter revenue of $81.6 billion, up 85% year over year. Analysts project second-quarter revenue of about $91.7 billion, a 96% increase from a year earlier. Aggregated forecasts expect full-year revenue to rise roughly 81% to about $392 billion, with some models projecting annual revenue could exceed $400 billion this year and reach about $554 billion next year if current trends continue.

Valuation metrics have moved lower. The company’s forward price-to-earnings ratio is about 20, below its five-year average near 53. That forward multiple is lower than those for several large, slower-growth firms where forward P/Es run higher.

Company developments cited as demand drivers include increased spending on data-center compute for artificial intelligence workloads, and plans by major cloud providers and hyperscalers for significant capital expenditure this year. The U.S. has permitted sales of certain H200 chips to some Chinese customers, and Nvidia recently introduced a new line of central processing units.

Analysts identify competitive and demand risks, noting that some large customers are developing their own GPU solutions and that newer chipmakers have entered the market. The consensus analyst price target is near $309, implying about a 60% increase from the $189 trading level.