Shares of NVIDIA (NVDA) suffered additional selling on Tuesday as the stock closed 2024 on a soft note.
The AI giant’s stock has now dropped 12% from its post-earnings November highs as investors appear to have been reassessing their “value” of the AI industry stocks over the last month.
Shares of other AI companies like Microsoft (MSFT), Amazon (AMZN) and Google (GOOG) have all suffered the same trend of selling as the year closes.
In November, NVIDIA provided positive operating results from its recent operating quarter. Investors were left disappointed that the company’s management had not increased its outlook for the company’s February 26 earnings report.
The company has seen some positive news this week. Analysts are expecting to see NVIDIA’s involvement in robotics act as the next growth catalyst for the stock in 2025.
But today, the stock continues to rest just above an increasingly critical price level.
NVIDIA shares have been bouncing between the $135 and $140 prices for much of December. Last week, the price encroached $135 to move to $130 as investors started to grow more fearful about the market’s volatility.
The $130 price level has been a significant support and resistance price for NVIDIA shares through 2024. A break below that key price will increase selling pressure immediately. That break would also target a move to $120, a 20% decline from the stock’s highs.
A 20% decline is often regarded as a “Healthy Correction. This means that investors would move off the sidelines to take advantage of the “dip” to add shares of NVIDIA to their holding.
From a long-term perspective, NVIDIA stock remains in a bull market trend. Our price target for the stock is $175.
