Nvidia (NVDA) shares fell 1.97% to $169.66, sliding below their 50-day moving average (DMA) for the first time since May. The 50-day moving average is a closely watched technical level that traders use to track short-term momentum. If the stock stays below this level, it could face more selling pressure in the near term. The decline came after Nvidia dismissed reports of supply shortages tied to its new Blackwell chips.
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Worries Linger Despite Nvidia’s Reassurance
The AI chip leader issued a newsroom post rejecting reports of severe supply problems, calling them “erroneous chatter.” The company posted a message on X (formerly Twitter) that there are no shortages of its H100, H200, or Blackwell GPUs and that it has enough chips to meet all customer orders.
The statement did not calm investors. Many traders saw it as proof that demand for the new Blackwell GPUs is higher than what Nvidia can deliver right now.
This has raised fresh concerns about near-term sales. If Nvidia cannot deliver enough chips, AMD (AMD) and Intel (INTC) may gain ground. On the Q2 call, CEO Jensen Huang noted that “H100 is sold out” and “H200s are sold out,” a clear sign that supply is still very tight, adding to worries that Nvidia may not be able to deliver chips fast enough to match rising orders.
Q2 Data Center Miss Raises Concerns
Nvidia’s data center unit is still the main driver of growth. In the Q2 earnings call, revenue from the segment jumped 56% from last year. Even so, the result fell short of Wall Street’s high expectations. Analysts said the revenue miss likely reflects Nvidia’s struggle to get enough of its top GPUs into the market.
It’s important to remember that demand for Blackwell GPUs remains strong and is expected to drive growth into 2025. Cloud giants including Google (GOOGL), Meta (META), and Amazon (AMZN) continue to place large orders for Nvidia’s chips.
The real challenge is how quickly Nvidia can deliver new supply and keep up with the surge in AI spending.
Is NVDA a Strong Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on NVDA stock based on 34 Buys, three Holds, and one Sell assigned in the past three months. Further, the average NVDA price target of $210.75 per share implies 23.40% upside potential.
