Nvidia’s (NVDA, Financial) shares tumbled more than 4% on Monday, hitting the lowest since February 10, while investors rushed to embrace cyclicals, the Dow Jones Industrial Average hitting a record high. It is a return to the downward trend from August, and the shares could not stay above the critical $141 support level. Analysts have pointed out that one might be achieved as the stock reaches the areas near the $136-$134 support levels. Another signal was a Demark indicator that allowed determining the presence of bearish price exhaustion, which signaled a short-term decline.
However, The Current selloff can be attributed to a larger market phenomenon, where people are dumping growth stocks like Nvidia and investing in more cyclical businesses due to a perceived ‘better’ economy ahead. On the other hand, fundamentals such as NVIDIA’s status as a leader in providing solutions for artificial intelligence make me believe its long-term trajectory remains bulletproof.
Still, Nvidia has solid long-term performance, as it rose 187% year to date and 197% over the last 12 months. This has continued to be a key strength in the company’s growth, especially within the AI sector, though in the short run, prices will be volatile in line with market trends.
This article first appeared on GuruFocus.
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