Nvidia (NVDA), the leading AI chipmaker, saw its shares fall sharply on Monday, continuing a decline from last Thursday’s record high.
Despite an absence of significant company-specific news, investors appear to have seized a broader market lull as an opportunity for profit-taking. This comes after a substantial surge in Nvidia’s stock, driven by the booming AI sector this year.
On Monday, Nvidia shares dropped 6.7%, closing at $118.11. The stock has now fallen 16% from its all-time intraday high of $140.76 reached last Thursday.
Key Levels to Watch Amid Bearish Pattern
Since bouncing off the 50-day moving average in April last year, Nvidia shares have soared, with investors buying on dips. However, last Thursday’s intraday reversal from the record high formed a bearish engulfing pattern, a technical indicator that suggests potential downside, particularly after a significant run-up.
Should Nvidia’s price continue to slide this week due to changing sentiment, investors might monitor the $119 and $110 levels, where the stock has previously found support during minor pullbacks over the past three weeks. Failing to maintain these levels could lead to a drop towards $97, a level that aligns with several previous record highs.
Strategic Middle Eastern AI Partnership
In other news, Nvidia has secured a deal to implement its AI technology in data centers owned by Qatari telecom giant Ooredoo across five Middle Eastern countries. This agreement was revealed by Ooredoo’s CEO in an interview with Reuters on Sunday.
While the financial terms were not disclosed, the deal will allow Ooredoo’s data center clients in Qatar, Algeria, Tunisia, Oman, Kuwait, and the Maldives to access Nvidia’s advanced AI and graphics processing technologies.
“Ooredoo’s business-to-business clients will gain a competitive edge with services unavailable to their rivals for another 18 to 24 months,” said CEO Aziz Aluthman Fakhroo.
This partnership comes amidst tightened U.S. export controls on advanced chips, aimed at preventing China’s access to sophisticated AI technologies through Middle Eastern channels.
