Key Insights
- Nvidia stock price has formed a giant megaphone pattern on the daily chart.
- The ongoing fears about competition from Google are unwarranted.
- Nvidia has numerous bullish catalysts that will drive its stock higher.
Nvidia stock price has plummeted and moved into a technical correction after plunging by 16% from its highest point this year. This crash continued this week amid fears of competition from Google. Still, the NVDA stock has formed a highly bullish pattern pointing to an eventual rebound.
Nvidia Stock Price Technicals Points to a Rebound
The daily timeframe chart shows that the Nvidia stock price bottomed at $87 earlier this year, following Donald Trump’s announcement of reciprocal tariffs. It then rebounded and hit a record high of $212, becoming the first company to hit a $5 trillion market capitalization.
Recently, however, the stock has plunged and entered a correction, erasing billions of dollars in value.
On the positive side, the stock has crashed to the 100-day Exponential Moving Average (EMA), indicating that bulls remain in control despite the recent decline.
Most importantly, the stock has formed the highly bullish megaphone pattern, which is made up of two ascending and diverging trendlines. Its name comes from the fact that it resembles a megaphone, the musical instrument.
Therefore, the NVDA stock price will rebound in the coming weeks or months, and retest the upper side of the wedge, potentially to the all-time high of $212. A drop below the megaphone pattern will invalidate the bullish outlook.
NVDA Stock Has Crashed Amid Competition Concerns
One of the primary reasons the Nvidia stock price has declined over the past few weeks is that investors are concerned about potential competition.
For example, the stock dropped after OpenAI announced a $300 billion deal with Broadcom to make custom chips. Under the deal, OpenAI will design the chips and then Broadcom will manufacture them.
OpenAI’s goal is to reduce its reliance on chips made by Nvidia. The company has also inked a deal with AMD, another top semiconductor firm.
The most recent source of concern is that Google’s Tensor chips could become a major player in the AI industry. In addition to Google, some top companies, including OpenAI, have committed to using the chips.
Still, there are signs that these fears are unwarranted. First, Nvidia has a first-mover advantage in the AI industry, which means its business is likely to continue growing in the coming years. Besides, the company has a monopoly with CUDA, a piece of software that helps to convert general-purpose GPUs for use in the AI industry.
Nvidia Has Done Well Despite AMD Competition
Second, the company has continued doing well despite the rising competition from AMD, which has about 10% of market share in the industry.
The most recent results showed that the company’s revenue continued soaring, reaching $57 billion in the third quarter. Its compute business made $43 billion in revenue, up from $27 billion in the same period last year.
Its networking business generated $8.2 billion in revenue, representing a significant increase from the $3.1 billion it reported last year. The company also boosted its forward guidance, with its fourth quarter revenue expected to be $65 billion.
Third, there are signs that Nvidia stock has become a bargain, with its forward price-to-earnings ratio coming in at 38, much lower than the five-year average of 58. Its forward PEG ratio is 1.02, also lower than the sector median of 1.66.
Additionally, the Trump administration is deliberating on whether to allow Nvidia to sell its Blackwell chips to China, the biggest market in the industry. Such a move is likely to lead to increased demand and faster-than-expected financial results.
Nvidia stock price has crashed in the past few weeks amid rising concerns about the company. However, there are technical and fundamental reasons why this crash may be about to end soon.
Technically, it remains above the 100-day Exponential Moving Average and has formed a megaphone pattern. Fundamentally, there are signs that the ongoing fears about the company are unwarranted.
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.