Nvidia (NVDA) saw a sharp decline of over 6% today, losing more than $200 billion in market capitalization. The drop was triggered by reports that Trump officials are discussing tighter restrictions on Nvidia’s China sales, particularly limiting the sale of the H200 AI chip.
Despite the selloff, some analysts and investors believe the pullback presents a buying opportunity, especially considering Nvidia’s strong positioning in AI and the long-term demand for its chips.
Why Did Nvidia Drop Today?
The primary catalyst behind today’s drop was new discussions in the U.S. government about further restricting Nvidia’s AI chip exports to China. The proposed curbs could limit sales of the H200 chip, which is currently a key product for Nvidia in the Chinese market.
This follows previous restrictions on A100 and H100 chips, which forced Nvidia to develop scaled-down versions to continue sales in China. With another round of potential restrictions looming, investors reacted negatively, leading to a sharp selloff in NVDA.
Is Nvidia a Buy After This Drop?
While today’s decline may have rattled short-term traders, some major investors see this pullback as a buying opportunity.
Pat Gelsinger Buys the Dip on Nvidia
Former Intel CEO Pat Gelsinger believes the market reaction to the news is wrong and sees it as an opportunity to buy AI stocks at lower prices.
Lowering the cost of AI will expand the market. Today, I’m an Nvidia and AI stock buyer and happy to benefit from lower prices.
Technical Support at the 200-Day Moving Average
From a technical analysis standpoint, Nvidia is currently sitting at the 200-day moving average (200MA), which is often considered a strong support level. This suggests that Nvidia could see a rebound if buyers step in at this key technical zone.
While the news of restrictions on Chinese AI companies is weighing on sentiment, the broader AI trend remains intact, making the current dip an attractive buy-the-dip opportunity for long-term investors.
Nancy Pelosi Sold $1.3M in Nvidia Stock Last Month
Interestingly, Nancy Pelosi sold $1.3 million worth of Nvidia stock in February, well ahead of today’s news.
This sale has raised eyebrows, as Pelosi’s trades have often been ahead of major market-moving events. While it’s unclear if she had any inside information, her decision to offload Nvidia before this drop is notable.
Nancy Pelosi sold $1.3M of Nvidia stock last month.$NVDA has fallen 17% today. pic.twitter.com/W60hk8R8FT
— Quiver Quantitative (@QuiverQuant) January 27, 2025
China’s DeepSeek AI vs. U.S. AI Giants – What’s Next?
Beyond Nvidia’s China sales restrictions, another AI-related development is raising concerns:
A Chinese AI startup, DeepSeek, has secured $6 million in funding, a tiny amount compared to the $250 billion market cap of major U.S. cloud companies. This raises questions about China’s ability to compete in AI development while facing increasing restrictions on U.S. chips.
CoinCodex Stock Prediction: Sideways in Q1, Bearish in Q2
Our CoinCodex algorithmic price prediction suggests that Nvidia stock will trade sideways in Q1, followed by a slow decline in Q2 due to increasing regulatory concerns and valuation pressures.
While our short-term outlook is cautious, some analysts remain bullish on Nvidia’s long-term potential.
AJ’s More Bullish Forecast: $200 Price Target
While our prediction suggests some near-term weakness, crypto and AI investor AJ (@alojoh) remains bullish on Nvidia, forecasting a $200 price target by the end of the year.
If Nvidia can weather the China export restrictions and continue to lead in AI chip production, a rebound to $200 could still be in play.
Nvidia has been flat for nearly 6 months at the current $133 level and implied MCap of 3.30T.
Just on annualised current quarter earnings the implied multile is a modest 35x for one of the best companies around, run by one of the best CEOs of our time.
My price target is $200… pic.twitter.com/Ukr7WAuNoa— AJ (@alojoh) December 13, 2024
Final Take: Nvidia’s Dip May Be an Opportunity
Despite today’s drop, Nvidia remains a dominant force in AI and continues to benefit from the rising demand for AI computing power.
- Pat Gelsinger is buying the dip
- NVDA is at the 200MA support level
- Bullish analysts still see $200 as a price target
While short-term risks remain due to China restrictions and regulatory scrutiny, long-term investors may see this as an opportunity to accumulate before Nvidia’s AI dominance continues to fuel future growth.
