Nvidia stock extended its sell-off on Tuesday and is now at risk of losing its position as the second-largest company by market value to Alphabet. The decline pushed the stock to a low of $166, its weakest level since April 2. The slide could continue as OpenAI loses momentum and Anthropic’s IPO plans slip further.
OpenAI and Anthropic Woes Are Continuing
Nvidia stock has come under pressure as its top companies like OpenAI and Anthropic continue to face major challenges.
According to WSJ, OpenAI’s revenue jumped by 50% in the third quarter from the second one to $10 billion. While this growth was encouraging, the company continues to suffer huge losses. Its adjusted operating margin improved from minus 150% to minus 109% from the second quarter to the third. The loss stood at over $10.9 billion during the quarter.
These numbers likely explain why the company’s fundraising suffered a large setback. It had set to raise $30 billion at a $1.4 billion valuation, but instead raised $11 billion at a $1.25 trillion valuation.
Anthropic is also facing challenges as it moves towards its initial public offering (IPO). According to the WSJ, the company is now aiming for a $1.3 trillion valuation, much lower than the $2 trillion it was targeting. The sobering view comes after the company’s S1 document showed that it continued to suffer losses amid the rising cost of compute.
These metrics are important for Nvidia for two main reasons. First, the company is a major investor in the two companies, meaning that its valuation has suffered because of their devaluation.
Second, as investors turn their attention to profitability, the companies may decide to slow their AI rollout, which could weaken demand for Nvidia’s chips.
Nvidia Pressured Amid Jensen Huang Woes
Meanwhile, Nvidia stock has dropped sharply because of the ongoing woes facing Jensen Huang, who admitted to having an affair with a Chinese woman known as Alice Huang. US officials believe that Ms. Huang was a Chinese spy, who was passing information to China.
It is also believed that her company, Megaspeed, helped to facilitate the illicit sale of Nvidia chips to China.
Now, however, there are concerns about how this crisis will evolve and how it will affect the company in the long term. A key concern is whether Nvidia’s board will decide to push him out at a time when the company has no clear succession plan.
Still, on the positive side, there is a likelihood that the company will continue growing. In the past, other companies have survived such big scandals.
The company will next publish its financial results next week, confirming that the revenue growth has continued. Yahoo Finance data shows that the company’s revenue jumped by 91% in the third quarter to $109 billion. In most cases, the real result is usually higher than expected.
Nvidia Stock Price Technical Analysis
The daily chart shows that NVDA stock has dropped sharply in the past few weeks, with its market capitalization down nearly $1 trillion. It has dropped to the crucial support level that coincided with the lowest swing in March.
The stock has slumped below the Strong, Pivot, Reverse level of the Murrey Math Lines tool of $175. It also remains below the 50-day moving average. Therefore, there is a likelihood that the stock will bounce back, potentially to the Major S/R pivot point of the Murrey Math Lines at $200.
On the other hand, a drop below the key support level of $164 will point to more downside, potentially to the support of $150.
Crispus is a distinguished Financial Analyst at, bringing over 12 years of expertise in cryptocurrency markets, specializing in Bitcoin and altcoins. Renowned for his sharp insights at the nexus of market trends and breaking news, Crispus delivers actionable analysis to empower investors. His work is prominently featured across leading platforms, including BanklessTimes, CoinJournal, HypeIndex, SeekingAlpha, Forbes, InvestingCube, Investing.com, and MoneyTransfers.com, cementing his reputation as a trusted voice in the financial world.
About this article
This report follows our Editorial Policy, Fact-Checking Standards and Code of Ethics. Found an inaccuracy? See Corrections.
Disclaimer. Informational only, not financial advice. Crypto, forex and stocks are volatile, high-risk assets — always do your own research and consult a qualified adviser.
