Nvidia stock (NASDAQ: NVDA) continues to trade in red for the fourth straight session as a wave of profit-taking swept across semiconductor stocks.
The artificial intelligence stocks are witnessing a broader volatility after Oracle’s disappointing cloud revenue guidance and a stark margin warning from Broadcom that exposed uncomfortable truths about AI chip profitability.
Nvidia stock is facing mounting questions about whether $4.34 trillion in sector valuation can withstand margin pressure and slowing capex from its largest customers.
Why is Nvidia stock down today?
The immediate catalyst was Oracle’s stumble. As one of Nvidia’s largest customers, Oracle’s weak results and mounting debt load triggered fears that even hyperscalers are hitting return-on-investment walls with aggressive AI infrastructure spending.
That was amplified hours later when Broadcom warned that gross margins would decline 100 basis points sequentially due to a rising mix of lower-margin custom AI system sales.
The message was unmistakable: as AI revenue scales, profit margins compress because custom accelerators and system builds carry inherently lower economics than specialty semiconductors.
Moreover, Nvidia’s recent weakness is not just about single-quarter earnings.
It reflects a broader realization that the semiconductor sector faces a profitable growth puzzle with soaring volumes, but margins under structural pressure.
The stock has declined 1.55% on Thursday, and sits 6.64% lower over four weeks, testing support at the 200-day moving average of $155.55.
The technical indicators flashed warning signs.
The RSI reading of 46.37 entered oversold territory, suggesting capitulation, yet momentum remains weak with MACD at -1.35.
What analysts say?
Wall Street’s response has been cautiously optimistic but increasingly cautious.
Raymond James reinstated coverage on Nvidia with a Buy rating and a $272 price target on Friday, describing the stock as a leader in “AI factories” with multi-year upside.
Morgan Stanley maintained its price target of $250, implying 37.55% upside, though the firm acknowledged near-term headwinds.
However, several analysts sounded warning notes. UBS analysts warned that crowded investor positions, combined with margin concerns, could trigger sustained selling pressure
The question now is whether this is a healthy correction in a long-term trend or the start of a re-pricing.
Oracle and Broadcom forced a discussion about how long hyperscalers will sustain capex growth if returns deteriorate.
AMD shares fell 3.05% in sympathy, suggesting the weakness is sector-wide. TSMC held up relatively better at -2.35%, implying investors are rotating toward foundry players.
For Nvidia investors, three variables matter: whether Oracle stabilizes, whether Broadcom’s margins recover as custom AI systems gain scale, and whether Nvidia itself can defend pricing power for next-generation Blackwell chips.
Until those questions are answered, expect volatility around technical support levels. The AI story remains intact, but the margin story now demands equal attention.
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