Nvidia Stock Down 17.5% YTD as Support Levels Come Under Threat

Nvidia (NASDAQ: NVDA) experienced a significant drop in stock price on Monday, plummeting by 8.69% and falling below the $115 level that has previously acted as both support and resistance in previous runs. Taking a look at the yearly chart, with weekly candles highlights the importance of this level, with the range leading to $120 also important as the pre-split level back in June 2024.

Nvidia's stock has started 2025 with price losses now reaching 17.5%, and with the next major level to the downside being the psychologically important $100, it would take significant pressure for the stock to test that range. There could well be some pause for breath whilst markets catch up with themselves, as risk and momentum trades unwind.

The decline to kick start this week follows tariffs coming into effect overnight, along with reports that suggest Nvidia's AI chips may be reaching China through third-party resellers, despite U.S. export restrictions.

The company’s Blackwell chips, known for their advanced AI capabilities, are reportedly making their way into China via entities registered in nearby regions. This situation raises potential concerns about violations of export control laws. Singaporean authorities are currently investigating Nvidia's customers for alleged involvement in shipping servers containing Nvidia chips from Singapore to Malaysia.

An Nvidia spokesperson has reiterated the company's commitment to adhering to U.S. regulations and has promised to investigate any deviations from these standards. Amid these developments, analyst Gil Luria from DA Davidson expressed concerns about the potential impact on Nvidia's operations due to further restrictions on sales to China.

Nvidia has previously introduced scaled-down GPU models, such as the H20, L20, and L2, specifically for the Chinese market to comply with export restrictions. The broader scrutiny of Nvidia and its partners may indicate a shift in regulatory approaches that could affect the AI supply chain on a wider scale.

As the global race in AI technology intensifies, navigating the increasingly complex regulatory landscape poses significant operational and legal challenges for Nvidia and its partners. Nvidia maintains that it should not be held accountable for resellers acting independently, though this stance might be tested by pending regulatory actions.

The situation reflects ongoing adjustments within the tech industry as it adapts to ensure compliance while sustaining growth in competitive markets.