Image Source: Pixabay

Nvidia Corp (NVDA) shares fell more than 4% on Friday morning, further extending November losses to nearly 14%. The world’s biggest company by market capitalisation announced its fiscal Q3 earnings on Wednesday, exceeding analyst estimates. 

The company saw its quarterly revenue rise by more than 62% year-over-year to $57 billion, increasing by $10 billion, or 22% from fiscal Q2. The positive results triggered a major spike in the stock price, up 8.4% through Thursday, but those gains have since been erased.

The stock is fighting against a wave of sell signals from some of the biggest investors. Last week, Peter Thiel’s Thiel Macro revealed that it exited its NVDA position, selling its entire stake during Q3. The firm held 537,742 shares, which would have been worth $100 million. It followed an earlier news report during the week that SoftBank had also sold its entire stake in Nvidia, worth $5.8 billion.

But these are not the only companies betting against Nvidia. Scion Capital, the hedge fund founded by Michael Burry, said last month it sold short $186 million worth of Nvidia shares in Q3. This was not his first bet against Nvidia this year; he had just exited another $100 million short position on the stock he had opened in Q1, according to a report by Capital.com.

NVDA Technical Analysis

(Click on image to enlarge)

Technically, the NVDA stock continues to trade within an ascending wedge formation despite falling slightly below the 100-day moving average line. The 14-day RSI still indicates short-term bearish pressure, with some room left to run before triggering an oversold alert. 

Therefore, the 38.2% Fibonacci retracement levels could provide the next rebound, as demonstrated in the chart. The 50% Fib level forms a long-term support zone, should the downward momentum take the stock price below $160.

Once a rebound is triggered, investors can expect a rally towards its current historical highs of about $212 (factoring in the multiple splits over recent years).

Why a Rebound Is Inevitable

While short-term, the stock continues to trade under pressure from some major investors in the company, its strong fundamentals support a long-term bull case. Nvidia has become the darling of AI. Its powerful GPUs are powering advances in artificial intelligence. 

The company issued an even more ambitious revenue guidance for the fourth quarter of $65 billion, stating that explosive growth had been signaled heading into the final quarter of the year. 

This guidance is well above the analysts' average estimate of $61.66 billion. The guidance was described by some publications, like Reuters, as calming AI bubble jitters. Nvidia CEO Jensen Huang also said sales for the company’s current-generation GPU, called Blackwell, are “off the charts.” In October, he said Nvidia has $500 billion in AI chip orders for 2025 and 2026 combined.

Conclusion

Nvidia’s latest pullback to $174 was short-lived, with the stock bouncing back to $180 in just over an hour. However, even at $180, as of this writing, there is still room to recover towards $200 and above heading into the tail end of the year.

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