Investors looking for reasons to scoop up Nvidia (NASDAQ:NVDA) stock have certainly been able to find them. But the case against Nvidia stock hasn’t been a terribly tough one to make either.
This tug-of-war has been evident in Nvidia’s stock chart and it has become more obvious recently . The highs of Nvidia stock are getting lower, but its lows are getting higher. The end result will be an inevitable, imminnt showdown between the bulls and the bears.
The outcome of that showdown, however, has less to do with the company’s merits and more to do with investors’ perception of NVDA stock. And that perception is going to be at least partially driven by the macro environment.
Mixed Messages
That’s not usually how the market works. Usually, stocks more or less reflect underlying companies’ proven past, while factoring in their plausible future. The latter is always in flux. That’s what drives charts.
Sometimes though, traders aren’t quite sure what to make of a company or its stock. That’s when traders look to a chart for cues and clues about how to evaluate — and trade — the stock.
That’s where Nvidia stock is right now. Traders aren’t sure where it’s supposed to be.
Advanced Micro Devices (NASDAQ:AMD) is, of course, a key part of that confusion. Last quarter, for the first time in five years, AMD shipped more graphics cards than Nvidia did.
That data nugget, however, comes with a lot of footnotes. The figures include laptop GPUs, where Nvidia doesn’t have much of a presence. And, leveraging its newest, much- ballyhooed RDMA gaming technology. Advanced Micro Devices launched a handful of new products like the Radeon RX 5700 series graphics cards,
Meanwhile, Nvidia is the preferred hardware provider for artificial intelligence applications. That industry can spur more than $100 billion of hardware sales in 2025, but the chip industry is tough to handicap.
Then of course there’s Intel (NASDAQ:INTC), which is inexplicably getting into the discrete GPU market, even as it continues to let AMD tiptoe onto its CPU turf.
Then there’s the not-so-small matter of quantifying the impact of the tariff war underway between China and the United States. Never even mind Nvidia’s plans to acquire Mellanox Technologies (NASDAQ:MLNX), which are now in question.
Making matters more confusing is that not everyone’s upset that the deal may be “Dead on Arrival.”
NVDA Stock Is Getting Squeezed
The push and pull of these headlines has seemingly caused chaos for Nvidia stock, but there’s a method to the madness.
The chart of Nvidia stock tells the tale. The meltdown of NVDA stock late last year was caused by a combination of marketwide bearish pressure and the realization that the cryptocurrency mining mania was truly over. The revitalization of AMD’s graphics card business didn’t help either.
The sellers seemingly overshot their target, though. Since hitting a multi-month bottom in December, NVDA stock has formed what’s essentially a converging wedge pattern. moving sideways, and leading the bulls and the bears into a scenario in which one side or the other is going to have to make a commitment to its stance.
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Their failure to do so yet certainly makes sense. As was laid out above, investors have a great deal of conflicting data to sift through. The pro and the con arguments both hold water. The bulls almost have a slight edge though.
The stock chart shows us two big-time details about Nvidia stock. The chart is bullish, since the green 200-day moving average line is below all the other moving-average lines. And more pressure is being put on the upper boundary of the converging wedge pattern than on the lower boundary.
Don’t be misled though. A strong market tide in either direction could still easily snap either side of the wedge shape being formed.
The Bottom Line on Nvidia Stock
A move outside of the confines of the converging wedge pattern will likely inspire more headlines that are in sync with the move.
That is to say, a break above the upper boundary of the narrowing trading range will result in optimistic commentaries that fan those bullish flames. A break below the floor will likely lead to more pundits expressing doubts about NVDA stock. Reporters and commentators are also quite unclear about what to make of Nvidia stock, and they are looking to the chart for clues too.
Whatever’s in the cards, after NVDA was squeezed toward the tip of an ever-narrowing trading range for eight months, something’s got to give soon.
The move will probably be intense.
As of this writing, James Brumley held no position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley.
