Nvidia’s stock just plunged below a line traders have been glued to for months. On Tuesday, the world’s largest chip company closed at $167.22, dropping through its 50-day moving average of $171.02, a level it hadn’t broken since May. The plunge came during a brutal four-day losing streak, cutting Nvidia’s market value by more than $340 billion, according to data from Bloomberg. That dip happened as investors started walking away from big AI names, and Nvidia is right at the center of that exit. The company’s four-day decline now totals over 7%, and this comes right after it delivered a soft revenue forecast last week, raising fresh doubts about how fast the AI boom is actually growing. Even with the sharp selloff, Nvidia’s still up 78% from its April low, holding on to a $4.1 trillion market cap, still ahead of Microsoft, which sits at $3.72 trillion. But that’s not helping calm nerves. Traders now worry the hype has peaked at least for now. Traders eye $160 as next key level for Nvidia Buff Dormeier, the chief technical analyst at Kingsview Partners, said Tuesday’s close below the 50-day average is a clear sign things are slowing down. “This shows how the momentum has broken down, and it makes me concerned about the stock over the short term,” Buff said. He’s now watching $160 as the next support, and if that fails, it’s $145, the same level where Nvidia bounced back in June. “If it breaks under $145, I’d be really concerned about its prospects,” Buff added. The selloff didn’t just hit Nvidia. The entire equity market came under pressure, with investors worrying about global tension and bloated tech valuations. That combination made it easier for fund managers to rotate out of high-flying AI stocks. Nvidia was a natural target. Despite recent gains, the stock has gone nearly vertical this year, making it vulnerable to even the slightest negative trigger. And that trigger came fast. Last week’s earnings guidance didn’t deliver the confidence Wall Street was hoping for. Analysts didn’t panic, but the tone definitely changed. Many are still forecasting over 25% upside based on average price targets, but no one’s pretending like the next leg up is guaranteed. As Buff put it, “There’s still long-term opportunity, but it seems like it has peaked for the short or intermediate term.” China builds its own AI chips as Nvidia faces pressure from both sides While Nvidia struggles to hold investor trust amid the rapidly growing AI market, China is pushing hard on its AI Plus plan, which will supposedly embed artificial intelligence across nearly every industry by 2030. This is backed by massive investment into homegrown chips, high-bandwidth memory, and a nationwide supercomputing buildout. Leading that effort is Cambricon, a local chipmaker that’s calling itself China’s Nvidia alternative, but Beijing doesn’t need Cambricon’s Siyuan chips to beat Nvidia’s Blackwell Ultra. What it wants is “good enough” tech that can support the country’s AI ambitions without relying on U.S. suppliers. The country’s political class isn’t chasing performance. It wants control. And Cambricon gives it just that. That puts Nvidia in a nasty spot. The company is caught between Washington’s export restrictions and China’s push for chip independence. Trying to keep both sides happy is backfiring. Nvidia’s now serving two masters and satisfying neither, a problem that’s only going to get harder as the tech war and geopolitical pressure continue. If you're reading this, you’re already ahead. Stay there with our newsletter.Nvidia’s stock just plunged below a line traders have been glued to for months. On Tuesday, the world’s largest chip company closed at $167.22, dropping through its 50-day moving average of $171.02, a level it hadn’t broken since May. The plunge came during a brutal four-day losing streak, cutting Nvidia’s market value by more than $340 billion, according to data from Bloomberg. That dip happened as investors started walking away from big AI names, and Nvidia is right at the center of that exit. The company’s four-day decline now totals over 7%, and this comes right after it delivered a soft revenue forecast last week, raising fresh doubts about how fast the AI boom is actually growing. Even with the sharp selloff, Nvidia’s still up 78% from its April low, holding on to a $4.1 trillion market cap, still ahead of Microsoft, which sits at $3.72 trillion. But that’s not helping calm nerves. Traders now worry the hype has peaked at least for now. Traders eye $160 as next key level for Nvidia Buff Dormeier, the chief technical analyst at Kingsview Partners, said Tuesday’s close below the 50-day average is a clear sign things are slowing down. “This shows how the momentum has broken down, and it makes me concerned about the stock over the short term,” Buff said. He’s now watching $160 as the next support, and if that fails, it’s $145, the same level where Nvidia bounced back in June. “If it breaks under $145, I’d be really concerned about its prospects,” Buff added. The selloff didn’t just hit Nvidia. The entire equity market came under pressure, with investors worrying about global tension and bloated tech valuations. That combination made it easier for fund managers to rotate out of high-flying AI stocks. Nvidia was a natural target. Despite recent gains, the stock has gone nearly vertical this year, making it vulnerable to even the slightest negative trigger. And that trigger came fast. Last week’s earnings guidance didn’t deliver the confidence Wall Street was hoping for. Analysts didn’t panic, but the tone definitely changed. Many are still forecasting over 25% upside based on average price targets, but no one’s pretending like the next leg up is guaranteed. As Buff put it, “There’s still long-term opportunity, but it seems like it has peaked for the short or intermediate term.” China builds its own AI chips as Nvidia faces pressure from both sides While Nvidia struggles to hold investor trust amid the rapidly growing AI market, China is pushing hard on its AI Plus plan, which will supposedly embed artificial intelligence across nearly every industry by 2030. This is backed by massive investment into homegrown chips, high-bandwidth memory, and a nationwide supercomputing buildout. Leading that effort is Cambricon, a local chipmaker that’s calling itself China’s Nvidia alternative, but Beijing doesn’t need Cambricon’s Siyuan chips to beat Nvidia’s Blackwell Ultra. What it wants is “good enough” tech that can support the country’s AI ambitions without relying on U.S. suppliers. The country’s political class isn’t chasing performance. It wants control. And Cambricon gives it just that. That puts Nvidia in a nasty spot. The company is caught between Washington’s export restrictions and China’s push for chip independence. Trying to keep both sides happy is backfiring. Nvidia’s now serving two masters and satisfying neither, a problem that’s only going to get harder as the tech war and geopolitical pressure continue. If you're reading this, you’re already ahead. Stay there with our newsletter.