Last week, the major US stock indexes concluded on a down note, and on Friday they experienced their sixth consecutive session of losses, the longest streak in more than a year. The technology-focused Nasdaq fell 2.05% to close at 15,282.01, while the broader Nasdaq also saw a decline, falling 0.88% to close at 4,967.23.
The drop was influenced in part by a pullback in semiconductor companies globally, including Nvidia (NASDAQ ) stock, retreating from recent highs as investors took profits following a relentless rally.
Nvidia and chipmakers slump amid macroeconomic fears
Amid the latest selloff, Nvidia shares plunged 10% on Friday, retreating to their lowest levels since late February.
In the United States, the Philadelphia Semiconductor Index (SOX) hit a roughly two-month low on Thursday and continued to fall through Friday. This sentiment was reflected in Asian markets, where chip-related stocks fell significantly in Tokyo and Seoul.
Overall market sentiment was affected by the decline in TSMC's share price, even though the company beat market expectations with its January-March results, which were announced on Thursday.
Additionally, market sentiment was also affected by geopolitical unrest in the Middle East, as well as a worse-than-expected earnings report from ASML Holding (NASDAQ:)(AS:) Holdings, a major semiconductor player.
“Why are the semifinals being sold? “Everything was likely in the preview, we think some semi-stocks will likely struggle due to mixed results and a pause in the biggest ai forecasts that boosted the group from January to last month,” Citi analysts said in a recent note. .
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“We continue to believe that some semi-finalists will face headwinds until June/July, when it may become apparent that estimates are about to rise again and we believe this is a buying opportunity for our buy-rated names,” they added.
Key Levels to Watch in Nvidia Stock
Nvidia is expected to report its latest earnings report next month, and investors are eagerly awaiting updates on current ai chip demand trends following several blockbuster prints.
Based on current consensus estimates, the chipmaker is expected to post earnings per share (EPS) of $5.19 and revenue of $22.91 billion, compared with $1.09 and $7.19 billion. dollars in the same period of the previous year.
Meanwhile, as a result of the recent pullback, Nvidia stock's 50-day moving average (MA) has been penetrated, “placing next support at the February gap and a Fibonacci retracement level in the 742-area.” $752,” Fairlead analysts highlighted.
“If this support zone is removed, the February gap would likely be filled and a secondary Fibonacci level near $615 would likely be targeted over the next 2-3 months,” they added.
“There are oversold conditions in the short term, but there is plenty of room for oversold territory in the medium term (and no signs of DeMARK), which tells us to consider reducing exposure to NVDA until a bounce is achieved, with a lower high now more likely. versus a resistance of $974.”
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