San Jose, California – Nvidia shares experienced a sharp decline of nearly 7% on Wednesday following the company’s announcement of a $5.5 billion charge due to U.S. restrictions on exporting its AI chips to China. This unexpected development left investors uncertain about the future of the company’s popular H20 chips and raised concerns about their potential use in building supercomputers in China, prompting the need for export licenses.
Market watchers were caught off guard by Nvidia’s need for export licenses for its H20 chips, as the company had previously designed them to comply with chip export regulations set during the Biden administration. This news comes amid a backdrop of trade policy uncertainty in Washington and questions surrounding big tech AI spending.
Despite a modest recovery from this month’s low, Nvidia shares have still seen a significant decline in value since the beginning of the year, underscoring the impact of geopolitical tensions and regulatory challenges on the tech industry. Investors are closely monitoring key support and resistance levels on Nvidia’s chart to gauge future price movements.
Technical analysis of Nvidia’s chart reveals a doji candlestick pattern, signaling indecision among buyers and sellers. The stock’s recent rally near the lower trendline of a falling wedge pattern was met with selling pressure near the pattern’s top trendline, highlighting the importance of these key levels for traders.
If Nvidia shares continue to fall, support levels to watch include $96 and $76, with potential buying opportunities at these price points based on historical data. Conversely, a breakout above the falling wedge pattern’s top trendline could lead to resistance levels at $130 and $150, calling for caution among investors seeking to capitalize on potential gains.
Overall, Nvidia’s stock performance reflects the ongoing challenges faced by tech companies operating in a complex geopolitical landscape. As investors navigate uncertainties in trade policies and regulatory environments, careful monitoring of key price levels and chart patterns is essential to making informed investment decisions in the volatile tech sector.