Nvidia shares are testing their 200-day moving average as traders look at the risk of substitution in the AI chip trade.
- Nvidia NASDAQ:NVDA slipped 1.53% before the bell to $193.92. The stock had gained 0.71% at Tuesday’s close.
- The stock trades above its 200-day moving average but sits under both its 20-day and 50-day averages.
- DeepSeek’s chip plans are more of a hit to margins than to near-term revenue.
- Nvidia gets a boost from Vera CPU demand, but a single Perplexity order isn’t enough to move the overall story.
Nvidia NASDAQ:NVDA doesn’t look like it’s trading as a broken AI stock. It’s acting like a packed favorite where investors are questioning the margin story. As of 06:35 EDT in New York, U.S. cash equities hadn’t opened yet. July 8 isn’t listed as a Nasdaq holiday and the main NYSE session is 9:30 a.m. to 4:00 p.m. ET.
Nvidia finished Tuesday at $196.93, gaining 0.71%, while chip stocks were under pressure. Early Wednesday, MarketWatch had the stock at $193.92 in premarket, down 1.53%, with close to 976,000 shares changed hands. The focus isn’t on the slight premarket slip. Sellers keep testing the same area where Nvidia either holds its trend or gives up its support.
| Market signal | Latest print | Investor read-through |
|---|---|---|
| Nvidia close, July 7 | $196.93, +0.71% | Stock didn’t finish at the session lows after the DeepSeek news |
| Nvidia premarket, July 8 | $193.92, -1.53% | Premarket shows macro selling pressure out of the gate |
| Nvidia 52-week range | $161.16-$236.54 | Premarket sits about 18% off the 52-week top |
| Nvidia market cap at prior close | $4.77 trillion | Even a small move in the multiple shifts hundreds of billions |
The broader market is looking even weaker than Nvidia’s finish. Reuters said Nasdaq 100 futures dropped 1.12% at 04:56 a.m. ET, and S&P 500 futures were down 0.84% after oil prices spiked on fresh Middle East concerns. On the previous day, the Nasdaq Composite lost 1.16%, the PHLX chip index slid 4.65%. Micron Technology NASDAQ:MU dropped 4.7% and Sandisk NASDAQ:SNDK shed 7.3%.
Chip stocks showed relative weakness. Intel NASDAQ:INTC, Advanced Micro Devices NASDAQ:AMD, Micron, and SK Hynix KRX:000660 sold off more than Nvidia Tuesday. If Nvidia drops later, that won’t be about investors missing the big AI story. It’ll be because the premium disappears as customers and competitors look to bring more silicon inside their own products.
| Technical gauge | Level | What it says |
|---|---|---|
| 20-day average | $201.92 | Nvidia trades under the near-term average |
| 50-day average | $209.60 | Buyers from the rally are still down |
| 200-day average | $191.26 | Stock is near its longer-term support |
| 14-day RSI | 43.53 | Reading is above oversold |
Nvidia is trading just 1.4% above its 200-day average in premarket, so that level is key now. If the stock holds, it stays in the broad range. Breaking below would push it into portfolio risk territory, especially for managers who use the 200-day as a sell trigger.
DeepSeek news is more about pricing power ahead than China sales now. Reuters said DeepSeek is working on its own inference chip, citing three sources. Richard Windsor at Radio Free Mobile told Reuters: “Nvidia is at zero in China and staying there.” That’s the right way to look at it. If China is already out of Nvidia’s short-term server chip story, the direct damage is capped. The risk is inference chips go custom sooner than bulls expect. Reuters
Nvidia posted big numbers, but not every bull is off the hook. Fiscal first-quarter revenue jumped 85% to $81.6 billion, with data-center sales up 92% to $75.2 billion. The company sees second-quarter revenue of $91.0 billion, plus or minus 2%, and said its outlook does not factor in any China data-center compute sales. Jensen Huang said, “Agentic AI has arrived.” SEC
| Nvidia Q1 FY2027 revenue line | Revenue | Year-on-year change | Share of total revenue |
|---|---|---|---|
| Data Center | $75.25 bln | up 92% | 92.2% |
| Hyperscale | $37.87 bln | up 115% | 46.4% |
| AI Clouds, Industrial & Enterprise | $37.38 bln | up 74% | 45.8% |
| Edge Computing | $6.37 bln | up 29% | 7.8% |
The table works both ways. AI is still most of Nvidia’s business. With over 90% of revenue coming from data-center sales, there’s little margin for error. The latest 10-Q brings it home: three customers accounted for 21%, 17%, and 16% of last quarter’s sales. That kind of concentration isn’t new, but with the stock near $5 trillion, it’s a bigger deal.
Nvidia’s bull story is about more than just GPU defense. The company is getting aggressive in CPUs, networking, systems and software. Perplexity says it will use Nvidia’s Vera CPU. Vice President Nate Kupp at Perplexity called Vera “a dead-on fit” after tests showed Nvidia’s CPU ran AI agent coding about 1.5 times faster than standard chips. Nvidia is guiding for $20 billion in Vera CPU sales by fiscal year-end. Reuters
That’s positive for the stock, but doesn’t end the bear case. Perplexity still hasn’t said how many CPUs it’s buying. Nvidia already gets plenty of credit for leading the market. Now, investors want to see that leadership spread outside of GPUs, especially before custom silicon cuts into high margins. Zachary Hill of Horizon Investments said it bluntly: “Expectations have gotten to be almost impossible to beat for these companies.” Reuters
Nvidia’s balance sheet gives it room. As of April 26, the company reported $50.3 billion in cash, cash equivalents and marketable debt securities. Nvidia bought back $20.2 billion of stock in the quarter and later okayed another $80 billion for buybacks. The buyback is a cushion, not a floor. It can help slow down multiple compression but won’t stop it if investors think inference silicon is leaving Nvidia faster than they expected.
For investors, it’s straightforward. As long as Nvidia trades above the 200-day average, it’s seen as a pressured but strong AI name. If shares slip below that mark, the market is starting to price in the risk that AI growth continues but Nvidia’s cut shrinks.
Related articles: NASDAQ:NVDA
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