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11.03.2025 01:11 PM
Market sees massive Monday loss. What's next for NVIDIA?

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The markets are going through a rough patch, and the next few days will be crucial. If inflation data comes in higher than expected, the pressure on stocks could persist, and the Federal Reserve might maintain its aggressive monetary policy stance.

At the same time, technical indicators are pointing to a potential short-term rebound. Investors should remain cautious and monitor key support and resistance levels.

Now, let's dive into the details.

The US stock market continues to fluctuate, with investors worried about recession risks, rising inflation, and possible trade restrictions. After a dramatic Monday, when the S&P 500 lost 2.7% and the Nasdaq fell 4%, stock futures remain under pressure.

The largest tech giants such as Tesla (-15.4%), Nvidia (-5.1%), and Apple (-4.9%) continue to show weakness.

NVIDIA: catastrophe or opportunity?

Nvidia's stock remains under pressure, having lost around 20% since the beginning of the year. On Monday, shares fell another 5% to settle at $106 per share. The decline is attributed to overheated valuations, a slowdown in demand for AI chips, and a general downturn in the tech sector.

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Over the past two years, Nvidia became a symbol of the AI boom, but after years of rallying, its stock became overvalued. Now the market is experiencing a correction, and investors are trying to determine if the downturn has bottomed out.

A significant signal came from analysts at Melius Research, who lowered their target price for Nvidia from $195 to $170, citing slower growth and potential sector regulation.

Despite the drop, Nvidia's fundamentals remain strong. The company's P/E ratio has decreased from 81 to 38, making its stock more accessible. Previously, investors paid a premium for growth while ignoring high multiples, but Nvidia is now within more realistic valuations.

The projected P/E ratio for 2025 is 25, which suggests that current levels could be appealing for long-term investors.

Buy or wait?

Nvidia's drop makes its stock more attractive, but risks remain. Short-term prospects depend on macroeconomic factors such as inflation growth, Fed decisions, and trade barriers.

In addition, Oracle's earnings report is scheduled for today, and its results could have an impact on Nvidia given their collaboration on the Stargate AI project.

In the long term, Nvidia remains a key player in the AI market, with its technologies continuing to dominate the industry. However, for those seeking the perfect entry point, it may be worth waiting for market stabilization or further growth signals.

Technical analysis of S&P 500 and Nasdaq 100

The S&P 500 opened at around 5,630 points today, still under pressure following yesterday's collapse. The index broke the key support level of 5,700, technically opening the path for a decline to the 5,550-5,500 area.

The nearest resistance is now at 5,700, and overcoming it could signal a short-term rebound. However, as long as the index remains below its 50-day moving average, the bearish trend is intact.

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The Nasdaq 100 is trading around 19,530, staying in a downward trend. The index broke the important 20,000 support level, increasing selling pressure. The next key support zone is at 19,200, and a break below it could trigger further losses to 18,800.

The RSI and MACD indicators remain in oversold territory, which could indicate a possible technical bounce, but the fundamental factors continue to weigh on the market.

Natalya Andreeva,
Analytical expert of InstaForex
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