Nvidias Death Cross: Traders Wary as Stock Momentum Fades

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Nvidia Death Cross Has Traders on High Alert as Momentum Withers

(Bloomberg) — Nvidia Corp. investors, accustomed to significant announcements and substantial stock gains during the company’s week-long GTC conference, found this year’s event lacking. With few near-term catalysts and shares at a critical technical level often signaling losses, market watchers warn of potential further disappointment.

The chipmaker’s shares are down more than 2% early Friday, poised to end the week down over 4%, following Chief Executive Jensen Huang’s keynote speech on Tuesday, which failed to reignite optimism in the artificial-intelligence trade. The stock is down 13% year-to-date, and on Thursday, its 50-day moving average fell below its 200-day average, forming a bearish “death cross” pattern. The last occurrence in April 2022 saw shares tumble more than 30% over the next two months.

“It’s got a lot of negative momentum,” said Larry Tentarelli, founder and chief technical strategist at the Blue Chip Daily Trend Report. “Nvidia is a very difficult chart.”

Concerns about future spending on artificial intelligence, sparked by China’s DeepSeek, along with an uncertain macroeconomic backdrop fueled by President Donald Trump’s tariff and trade-war threats, have weighed on Nvidia and its megacap technology peers in recent months. An index tracking the so-called magnificent seven big tech companies is down more than 15% this year.

Despite solid fundamentals and one of the lowest price-to-earnings ratios seen in years, investors await clarity on whether the growth Nvidia has promised, including a jump in first-quarter revenue to $43 billion, will materialize. In the broader AI trade, investors seek a more tangible return on investment to boost confidence in continued high spending levels.

“What the market is saying with Nvidia is, ‘we’re concerned about the economy, we’re concerned about DeepSeek,’” said Tentarelli, adding that any signal from hyperscalers to slow AI spending could spell trouble for chipmakers.

Another issue confronting Nvidia investors is the lack of catalysts to potentially boost the stock in the coming weeks, making the macroeconomic backdrop even more critical. “The catalyst will probably come more broadly,” said Richard Ross, Evercore ISI’s head of technical analysis. He pointed to April 2, when Trump has said his administration will levy reciprocal tariffs on foreign trading partners, as a key date to watch. Ross is less concerned with the death cross pattern because Nvidia shares have been trading in a range for some time, making trend-reliant technical analysis less useful.

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Earnings Due Friday

No major earnings expected

–With assistance from Subrat Patnaik and Wojciech Moskwa. (Updates stock moves at market open)