NVDA Stock Threatens 2nd Support as Legal Risks, Competition Overshadow Nvidia’s Q2
Despite delivering another quarter of record profits, NVIDIA faces renewed investor concerns tied to policy risks, increased competition...
Quick overview
- NVIDIA reported record profits but faces investor concerns due to U.S. policy risks and increasing competition in the chip market.
- The company's stock has declined 8% recently, influenced by fears of trade restrictions and competition from low-cost processors.
- Despite these challenges, NVIDIA's Q2 revenue grew 56% year-over-year, and it forecasts strong earnings for Q3.
- Technical analysis indicates potential support levels for the stock, but near-term volatility and risks remain a concern for investors.
Live NVDA Chart
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Despite delivering another quarter of record profits, NVIDIA faces renewed investor concerns tied to U.S. policy risks, export restrictions, and intensifying chip competition, leaving its stock under pressure.
Policy Uncertainty Clouds Market Sentiment
NVIDIA (NASDAQ: NVDA) has seen its momentum stall in the wake of mounting regulatory risks. The company’s stock slid 8% across two sessions, weighed down by reports of Alibaba’s low-cost processor and fears that U.S. trade restrictions could limit sales in China.
Chief Financial Officer Colette Kress clarified last week that the proposed 15% tariff on AI chip exports to China has not yet been formalized by U.S. authorities. For now, the lack of legal enforcement means NVIDIA can continue selling AI processors into China without additional costs. Still, the policy limbo adds uncertainty, fueling volatility in an already fragile market environment.
Sector-Wide Pressure Hits Semiconductors
The selloff has not been limited to NVIDIA. On Tuesday, NVDA shares fell another 2%, making it one of the worst performers on the Dow Jones Industrial Average. The PHLX Semiconductor Index (SOX) also suffered a broad decline, with peers such as Broadcom (AVGO) and Advanced Micro Devices (AMD) retreating as well. Concerns about slowing global demand and rising geopolitical risks have sparked a sector-wide downturn.
Strong Earnings and Q3 Guidance Still Stand Out
- Underneath the policy noise, NVIDIA’s fundamentals remain exceptionally strong:
- Q2 revenue surged 56% YoY, supported by robust AI and data center demand.
- Profitability improved across both GAAP and non-GAAP metrics, keeping margins resilient despite rising costs.
- For Q3, management forecasts $54 billion in revenue with mid-70% gross margins, reaffirming NVIDIA’s dominance in AI chips.
- This performance underscores the company’s strong positioning, though it has been largely overshadowed by regulatory and macroeconomic headwinds.
Technical Landscape: Support Levels in Focus
From a technical standpoint, NVDA’s chart has weakened after retreating from its recent all-time high of $184.47. The stock opened with back-to-back bearish gaps and broke below the 20-day SMA, which had been reliable support since May. Sellers tested the 50-day SMA (yellow), which held briefly but now looks vulnerable. Should the decline deepen, analysts highlight the $153 level as a critical area of support from prior cycle highs.
Conclusion: NVIDIA’s Q2 results confirmed its leadership in AI and data centers, with robust growth and resilient margins. Yet, export policy uncertainty, tariffs, and competitive threats have overshadowed fundamentals, sending shares lower in the short term. While long-term growth drivers remain intact, the near-term outlook is defined by volatility and downside risks, leaving investors cautious despite the company’s strong earnings story.
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