Key Updates
NVIDIA slipped 5.55% to $198.69 after hitting the psychological $210 level, following the disclosure of large short positions by Michael Burry against the stock. Despite the bearish pressure from the well-known investor, NVIDIA is bolstering its fundamentals with a strategic $1.2 billion partnership with Deutsche Telekom and higher target prices from analysts, supported by visibility of $500 billion in orders.
Current Trend
NVIDIA shares are volatile in the short term, down 3.96% on the day and 1.16% over five days, but they remain strong on the medium term, up 5.90% for the month and an impressive 73.53% over the past six months. The current pullback from $210 to $198.69 is a healthy technical retracement within a long-term uptrend, underpinned by AI-segment growth fundamentals.
Investment Thesis
The thesis rests on NVIDIA’s dominance in artificial intelligence and data centers, driven by rising demand for high-performance computing. The company continues to expand its ecosystem through major partnerships and sees $500 billion of orders slated for 2025-2026, providing predictable cash flow in the medium term.
Thesis Status
The investment case remains unchanged despite short-term pressure from institutional short positions. Growth drivers are strengthening via new partnerships and analyst upgrades, confirming the resilience of NVIDIA’s business model as the AI ecosystem expands.
Key Drivers
Key catalysts include: the disclosure of Michael Burry’s $1.1 billion short bets against NVIDIA and Palantir (Bloomberg), which adds short-term selling pressure; a partnership with Deutsche Telekom worth €1 billion to build an AI Cloud in Munich (TechCrunch); and Jefferies raising target prices amid visibility of $500 billion in orders (Börse Express).
Technical Picture
NVIDIA is in a correction from the local high of $210 to the current $198.69, representing a healthy pullback within a long-term uptrend. Key support lies in the $190-$195 zone; a break below could test $180. Resistance sits around $205-$210, and a breakout would open the path to new all-time highs.
Bull Case
- Deutsche Telekom partnership worth €1 billion to create an industrial AI Cloud with more than 1,000 NVIDIA DGX B200 systems strengthens the corporate segment (TechCrunch)
- Visibility of $500 billion in orders for 2025-2026 provides revenue predictability and confirms sustained demand for AI solutions (Börse Express)
- Jefferies’ target-price upgrades reflect positive sentiment from the analyst community (Börse Express)
- Impressive 73.53% gain over six months shows strong fundamental support and institutional interest in the AI sector
- CEO of Palantir Alex Karp’s defense of the stock, calling Burry’s short bets “crazy,” underscores confidence among industry leaders (Fortune)
Bear Case
- Michael Burry’s $1.1 billion short positions via put options create significant selling pressure and signal possible overvaluation of the AI sector (Bloomberg)
- Burry’s warnings of an “AI bubble” could trigger a broader tech correction and prompt valuation revisions for NVIDIA (Bloomberg)
- The current 5.55% pullback since the last report suggests technical weakness and the potential for further decline toward the $190 support level
- Negative momentum of 3.96% on the day and 1.16% over five days indicates short-term seller dominance
- High market expectations for an AI revolution raise disappointment risk if adoption slows