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Nvidia (NVDA) investors have had an un-Nvidia-like year so far.
Shares of the AI chip darling tanked 10% as investors fret over exposure to China in President Trump’s trade war and possible overbuilding of AI infrastructure. The company’s cautious first quarter margin outlook did little to ease worries.
The stock is below its key 50-, 100-, and 200-day moving average, a major sign of lost momentum among traders.
“I guess you can call it a healthy consolidation [in Nvidia],” Evercore ISI technical strategist Rich Ross told me on Yahoo Finance’s Opening Bid podcast (video above; listen below).
Ross has been studying market technicals for more than 30 years. In 2024, Institutional Investor ranked Ross No. 1 in his field for the seventh straight year. He was named to Institutional Investor’s All-America Research team for the 10th year in a row.
Read more: How does Nvidia make money?
Important technical indicators such as the relative strenth index (RSI) suggest Nvidia’s stock is oversold, Ross said. The RSI measures the speed and magnitude of a stock’s recent price changes in a bid to estimate overbought or oversold conditions.
Yahoo Finance data shows that Nvidia’s present RSI is at 47, below the 63-or-so level reached when the stock hit a record high in early January of this year around CEO Jensen Huang’s keynote at the Consumer Electronics Show.
“I think the next move is up in Nvidia,” Ross added.
To be sure, there is a catalyst to get Nvidia’s stock working up and to the right again.
Huang has it within his power to get the year back on track on March 18 at the company’s must-watch annual GTC event and in a financial analyst meeting on the following day. The event is being held in San Jose, Calif.
Huang will have to deliver on several fronts at the event, experts say.
First, he must provide intricate details on how much more powerful Nvidia’s next-generation chip Rubin is than the current gold standard in Blackwell.
Two, an update on the total AI addressable market opportunity for Nvidia is important, as investors have worried about AI infrastructure overbuilding.
And three, Huang would be wise to share offsets in the business to its China operations that are likely to be harmed by the Trump administration’s trade war.
“While market volatility and China headlines could pressure the stock in the near-term, we still believe fundamentals will eventually prevail with stock below its historical trough 25x price-to-earnings ratio,” Bank of America analyst Vivek Arya wrote.
