Analysis of NVIDIA's Recent Stock Performance (NVDA.US) Despite strong Q3 2026 results (revenue: $57.01B, +62% YoY; data center revenue: $51.2B, +66% YoY) and CEO Jensen Huang's bullish demand outlook, NVDA.US fell ~12% post-earnings (Nov 20–26, 2025) 529. Here’s a breakdown of key factors:
Reasons for the Pullback
Profit-Taking and Overbought Conditions:
NVDA.US surged 1,200% over three years before November 2025, making it vulnerable to profit-taking.
Technical indicators show bearish signals: RSI near oversold levels (34.7), MACD divergence, and price below key moving averages.
Geopolitical and Competitive Risks:
U.S. export controls limit advanced AI chip sales to China—a potential $50B/year market—creating uncertainty.
Competition from custom AI chips (e.g., AWS, Google) and alternatives like AMD pose long-term risks.
Insider Selling & Options Activity:
CEO Huang sold shares consistently since July 2025 (~$737M total), though part of pre-planned 10b5-1 trading.
Unusual put options volume ($65.6M in Nov 25) suggests hedging against downside.
Bullish Catalysts for the Next 6 Months
Fundamental Strength:
Q4 guidance projects record revenue ($65.0B, +14% QoQ) and gross margins ~74.8%.
Analysts expect FY2027 revenue to approach $200B, driven by AI infrastructure expansion.
Market Leadership:
Dominates 88% of compute & networking revenue (Q3 2026).
Partnerships with AWS, Microsoft, and OpenAI reinforce ecosystem dominance.
Analyst Confidence:
96% of analysts rate NVDA.US "Strong Buy" with a $253.20 avg. target (40% upside from $181.37).
Forward P/E of 44.89 is below historical highs, aligning with growth projections.
Key Risks to Monitor
Valuation Sensitivity: High growth expectations leave room for volatility if execution falters.
Regulatory Headwinds: Escalating U.S.-China tech restrictions could curb revenue growth.
Supply Constraints: Blackwell chip demand may outpace supply through 2026.
Conclusion
Short-term volatility reflects profit-taking and sentiment shifts, but NVIDIA's fundamentals remain robust with AI demand structurally intact. For the next 6 months:
Positives: Record revenue guidance, analyst upgrades, and market leadership in AI infrastructure.
Challenges: Geopolitical risks, insider sales, and technical bearishness require monitoring
NVIDIA's recent decline reflects short-term profit-taking and sentiment shifts rather than fundamental deterioration. The company's unparalleled position in AI infrastructure and robust guidance suggest long-term growth remains intact. However, geopolitical tensions, competitive threats, and macro volatility could drive near-term fluctuations
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