NVIDIA pulls back on profit-taking despite record AI chip demand
NVIDIA dropped 2.20% as investors locked in gains after the stock tripled over 18 months, even as data center GPU demand continues to outpace supply with Blackwell architecture orders booked through Q2 2027.
3 Reasons
Technical Profit-Taking at Resistance
NVDA hit its 200-day moving average upper band at $172 and RSI reached 74 (overbought territory). After gaining 285% since January 2025, institutional traders are taking partial profits. Short-term support sits at $155.
China Export Restriction Concerns
The Biden-era chip export controls to China are being tightened, with the H20 chip (designed specifically for the Chinese market) now under review. China represented ~22% of NVIDIA revenue in FY2025, and further restrictions could remove $8-10B in annual sales.
Competition from AMD and Custom Silicon
AMD MI350X benchmarks show 85% of NVDA H100 performance at 60% of the cost. Meanwhile, Google TPU v6, Amazon Trainium2, and Microsoft Maia are reducing hyperscaler dependence on NVIDIA GPUs for inference workloads.