Nvidia’s Record Run Clashes with Bearish Bets and Margin Squeeze

Nvidia’s record-breaking revenue and strong demand for its Blackwell AI chips underscore the company’s continued leadership in the fast-growing AI sector. However, narrowing profit margins, ongoing technical weakness, and rising macroeconomic uncertainty are tempering investor optimism. The recent selloff, driven partly by increased bearish options activity, has intensified concerns around the stock’s near-term outlook. With key support and resistance levels in focus, traders will closely monitor Nvidia’s price action, broader equity market sentiment, and upcoming economic data for further signals on potential directional shifts in the weeks ahead.

NVIDIA reported record revenue of $39.3 billion for the fourth quarter of fiscal 2025, up 12% from Q3 and 78% year-over-year, driven by explosive growth in its Data Center segment. Full-year revenue surged 114% to $130.5 billion, with GAAP earnings per share up 147%. CEO Jensen Huang highlighted strong demand for NVIDIA’s Blackwell AI supercomputers, which generated billions in sales in their first quarter. NVIDIA also announced a quarterly dividend of $0.01 per share, payable on April 2, 2025.

Nvidia reported better-than-expected fourth-quarter revenue and strong first-quarter sales guidance, but the upside was narrower than in recent quarters, leaving investors cautious. The company highlighted its new Blackwell chips, which are now generating higher-than-expected revenue after earlier supply-chain issues were resolved.

However, gross margins came in below estimates, weighed down by the accelerated rollout of new products, though Nvidia expects profitability to improve in the second half of 2025. CEO Jensen Huang pointed to growing demand for AI training as a future growth driver.

Nvidia acknowledged uncertainty around the potential impacts of US tariffs, though the company said it’s too early to assess how they might affect operations.

Nvidia shares slid 8.5% to their lowest level on Thursday amid concerns over the chipmaker’s AI-driven growth prospects. A massive bearish options bet, totaling over 300,000 contracts, wagered that Nvidia’s stock will drop another 12% by March 7, potentially exacerbating the day’s selloff. The surge in put volume—more than double the 20-day average—suggests at least one trader anticipates further downside, especially with major economic data and political events on the horizon.

Nvidia’s stock price has been on a downward trend since January 17, when it reached a high of 152.70. This decline was marked by the formation of a Bearish Engulfing Japanese candlestick, followed by a “Death Cross” bearish reversal, which intensified the downward momentum and caused Nvidia to drop to 112.70.

Despite a rebound in early February that brought the stock price to 143.13, the bulls were unable to sustain the upward momentum.

The downtrend is further supported by the Momentum oscillator and the Relative Strength Index (RSI), both indicating negative movement. Specifically, the prices are trading below the 50-period EMA, the Momentum oscillator is below the 100 threshold, and the RSI remains under the 50 baseline.

If the downward momentum persists, traders may look to target potential support levels at 112.70, 107.53, and 90.89. Conversely, should buyers regain control, potential resistance levels are estimated at 124.16, 136.95, and 143.13.

Nvidia’s impressive revenue growth and surging demand for its Blackwell AI chips reinforce the company’s dominant position in the AI industry. However, recent price action reflects growing investor unease, with narrowing profit margins, elevated volatility, and broader economic uncertainty adding to the cautious sentiment. The combination of technical weakness and heightened bearish options positioning has amplified downside pressure. Moving forward, traders will remain focused on Nvidia’s price behavior, key technical levels, and evolving macroeconomic conditions to gauge whether a recovery is possible or if further declines lie ahead.