Key Updates
NVIDIA is down -3.08% since the last report to $174.17, continuing its pullback after hitting new highs. The stock is showing short-term volatility as the broader market steps back from record levels following the PCE inflation data. Despite the current correction, the yearly gain remains solid at +29.69%, underscoring the strength of the longer-term uptrend driven by AI demand.
Current Trend
NVIDIA shares are in a short-term pullback, down -3.33% on the day and -2.85% over the month. The longer-term uptrend is intact, however, with a +29.69% yearly gain and +39.42% over six months. The current sell-off comes as tech indexes retreat from record highs after core PCE inflation came in as expected, keeping rate-cut hopes alive.
Investment Thesis
NVIDIA's investment thesis rests on its dominant position in AI accelerators and rising demand for compute power behind training and inference workloads. The company keeps expanding its partner ecosystem, as seen with IREN announcing new purchases of NVIDIA chips. Active managers are rotating back into tech, giving added support to sector leaders.
Thesis Status
The thesis holds despite the short-term pullback. The fundamental growth drivers haven't changed: demand for AI solutions keeps climbing, as reflected in record results from company partners and continued hardware purchases. The current decline is technical in nature, tied to the broader market backing off highs, not a deterioration in the company's operating performance.
Key Drivers
The main drivers remain growing AI demand and a widening partner ecosystem. IREN posted record quarterly revenue and announced new purchases of NVIDIA chips, confirming steady demand from data-center operators. Active managers are moving back into tech, giving shares additional support. On the downside, the market's pullback from record highs after the inflation data is a near-term headwind.
Technical Picture
NVIDIA is trading at $174.17, off its recent highs. The daily move is down -3.33%, but the long-term uptrend is unchanged. Six-month growth of +39.42% and a yearly gain of +29.69% confirm the strength of the primary trend. Current levels could offer a technical entry point, assuming the fundamental drivers stay in place.
Bull Case
- Record results from partners confirm steady demand for NVIDIA solutions - IREN posted record quarterly revenue and announced new chip purchases
- Active managers are rotating back into tech, adding demand for shares - BofA says managers are moving back into technology
- Inflation data matched expectations, supporting the case for Fed rate cuts - core PCE passed its first test for Fed easing
- Strong long-term performance, with a yearly gain of +29.69%, shows the uptrend's durability
- Six-month growth of +39.42% points to faster momentum through 2025
Bear Case
- The market's pullback from record highs is weighing on tech stocks - indexes fell from highs after the inflation data
- The -3.33% daily drop points to a technical correction in the near term
- A monthly decline of -2.85% could signal a shift in the short-term trend
- High market expectations for the company's results leave room for disappointment
- Growth concentrated in one sector (AI) creates risk if investment preferences shift