Nvidia (NASDAQ: NVDA) has entered bearish territory, with its stock dropping below $120 as the market reacts to the impact of tariffs introduced by former U.S. President Donald Trump.
Recent Market Turmoil
Over the past week, Nvidia’s stock has faced significant challenges. Initially hit by the DeepSeek sell-off, the stock struggled to regain momentum before being further impacted by new tariffs on imports from Canada, Mexico, and China.
During overnight trading, NVDA’s share price plunged by 6.5% to $112.09, marking a 27% decline from its record high. By the close of trading on January 31, the stock settled at $120.07, down over 3%. Pre-market trading on Monday indicated continued weakness, with a further 2.8% drop to $116.
Notably, the stock fell below its 30-week simple moving average (SMA) for the first time in over two years, a technical signal that could indicate prolonged weakness.
Why Is Nvidia’s Stock Dropping?
Investors are reacting to concerns that the tariffs will increase costs for technology companies reliant on global supply chains. Higher component costs could potentially squeeze Nvidia’s profit margins and impact its financial forecasts.
Earlier, on January 27, Nvidia lost nearly $600 billion in market capitalization following the release of DeepSeek’s cost-effective artificial intelligence (AI) model. This sparked concerns that cheaper AI alternatives could challenge Nvidia’s dominance in the sector.
AI Forecast for NVDA Stock
To predict Nvidia’s short-term performance, Finbold used an AI-powered prediction tool analyzing multiple models. Between February 3 and March 10, 2025, the tool anticipates a bullish rebound, estimating an average price of $146.67, reflecting a 25.58% gain.
- GPT-4o forecasts $135, citing stable market conditions.
- GPT-4 mini sets a target of $150, driven by positive momentum and a potential golden cross.
- Grok 2 Vision is the most optimistic, projecting $155 (a 32.71% increase), supported by AI expansion, lower interest rates, and favorable technical indicators.
- Wall Street’s Perspective on NVDA Stock
- Despite recent volatility, Wall Street analysts remain largely optimistic about Nvidia’s stock performance.
On January 31, Tigress Capital’s Ivan Feinseth upgraded his recommendation from ‘Buy’ to ‘Strong Buy,’ raising his NVDA price target from $170 to $200.
On January 27, UBS analyst Timothy Arcuri reaffirmed his ‘Buy’ rating and a $185 price target, emphasizing Nvidia’s strong financial outlook and promising first-quarter guidance.
Conversely, on January 28, Morgan Stanley’s Joseph Moore revised his price target downward from $166 to $152, expressing concerns over AI innovations like DeepSeek potentially driving down costs and affecting Nvidia’s market position.
Whether Nvidia can recover will depend on how well it navigates these challenges and maintains its leadership in AI and semiconductor innovation.
