Nvidia Below $100: Time to Buy the Dip or Wait for $90?

$NVIDIA Corporation( $NVIDIA(NVDA)$ )$ $S&P 500(. $S&P 500(.SPX)$ )$ $Technology Select Sector SPDR Fund( $Technology Select Sector SPDR Fund(XLK)$ )$ $Advanced Micro Devices( $Advanced Micro Devices(AMD)$ )$

Nvidia’s stock has taken a beating, dipping below $100 to $96.67 as of April 21, 2025, at 8:58 PM PDT, marking a 47% year-to-date decline. Despite CEO Jensen Huang’s pledge last week to balance commitments to both China and the U.S. amid escalating trade tensions, the market remains unconvinced. Analysts are now cautioning against buying U.S. stocks too early, citing macroeconomic headwinds like tariffs and a potential recession (odds at 45% for 2025). With NVDA hovering near multi-year lows, the question looms: is this a dip to buy at $90, or should you wait it out? Let’s dive into the data, sentiment, and strategies to navigate this pivotal moment.

Nvidia’s Slide: What’s Behind the Drop?

Nvidia’s fall below $100 comes despite Huang’s efforts to reassure investors of the company’s global strategy. Key drivers of the decline include:

  • U.S.-China Trade Tensions: The U.S. Commerce Department’s export licenses for Nvidia’s H20 GPUs, effective since last week, have halted sales to China—a market that accounted for 20% of Nvidia’s 2024 revenue. This move, part of broader trade restrictions, could cost Nvidia up to $18 billion in 2025 revenue, per Bloomberg Intelligence estimates.

  • Competition Pressures: Huawei’s new 910C AI chip, announced this week, combines two chips to rival Nvidia’s H100 performance, offering a cheaper alternative for Chinese firms. This, alongside AMD’s MI325X chips (priced at $10,000-$15,000 vs. Nvidia’s $30,000-$40,000 for Hopper GPUs), is eroding Nvidia’s pricing power.

  • Macro Headwinds: With the S&P 500 down 10.2% YTD at 4,795 and the Technology Select Sector SPDR Fund (XLK) off 15%, broader market fears—tariffs, a hawkish Fed (70% chance of a May rate hike), and slowing consumer spending (sentiment at a 2023 low of 65.8)—are dragging tech stocks lower.

Posts on X reflect a bearish tilt, with some users warning that NVDA could “flush” to recent lows around $90—a 7% drop from current levels—due to its heavy weighting in ETFs like QQQ (7%) and SPY (6%).

Analyst Sentiment: Mixed Signals

Analyst views are split. HSBC downgraded Nvidia to “Hold” on April 3, slashing its target from $175 to $120, citing concerns over pricing power and AI capex sustainability amid competition from low-cost models like DeepSeek’s. Others, like Bank of America ($160 target) and Morgan Stanley (still a “top pick”), remain bullish, pointing to a median 12-month target of $170—a 75% upside from $96.67. However, recent warnings from analysts, including at Investopedia, caution against buying U.S. stocks too early, given tariff uncertainties and a potential economic slowdown.

Seeking Alpha’s April 8 analysis called Nvidia a “buy under $100,” noting a forward P/E of 20.8 and a PEG ratio of 0.59, signaling undervaluation. Yet, StockInvest.us on April 20 forecasted a 21.95% drop over the next three months, with a price range of $69.77-$92.32, aligning with some X users’ $90 target.

Performance Snapshot: Nvidia vs. the Market

Here’s a table comparing Nvidia’s performance to broader indices as of April 21, 2025:

  • Nvidia’s Decline: NVDA’s 47% YTD loss far exceeds the tech sector’s 15% drop, reflecting company-specific risks.

  • AMD’s Edge: AMD’s cheaper chips are gaining traction, with a smaller YTD decline of 20%.

Visualizing Nvidia’s Fall:

The graph highlights Nvidia’s steep fall, with the $100 mark breached in April, raising questions about further downside.

Bull vs. Bear: Buy at $90 or Wait?

Bull Case

  • Undervaluation: At a forward P/E of 20.8, Nvidia looks cheap compared to its historical average of 35. Analysts like Morgan Stanley see 63-75% upside to $160-$170.

  • Long-Term AI Growth: Despite near-term hurdles, AI chip demand is projected to hit $119.4 billion by 2027 (Gartner). Nvidia’s Blackwell and Rubin platforms could drive future gains.

  • Export Workarounds: Nvidia has navigated past restrictions by developing compliant chips (e.g., H20). A similar pivot could mitigate China losses.

Bear Case

  • China Headwinds: The $18 billion revenue hit from export bans is significant, and Huawei’s 910C chip could further erode Nvidia’s market share in China.

  • Macro Risks: A potential recession, rising rates, and tariff escalations (if the 90-day pause ends without a deal) could push NVDA to $90, as some X users and StockInvest.us predict.

  • Competition: AMD and in-house chips from Nvidia’s top clients (Microsoft, Meta, Amazon) threaten its pricing power and margins, which were 55% in fiscal 2025 but could slip.

My Take: Nvidia’s fundamentals remain strong—fiscal 2025 revenue hit $130.5 billion, up 114% YoY—but near-term risks are real. I lean toward waiting for a dip to $90, where technical support and a better risk-reward ratio align. However, if you’re a long-term believer in AI, buying a small position now and adding at $90 could balance risk and reward.

Trading Strategy: Play the Levels

  • Wait for $90: Enter at $90, stop at $85, target $110. This level aligns with historical support and analyst downside projections.

  • Small Position Now: If you’re bullish, buy 25% of your intended position at $96.67, stop at $92, target $110, and add at $90 if it dips.

  • Hedge: Buy XLK $180 puts to protect against broader tech sector weakness, especially with tariff risks looming.

My Plan: I’m waiting for $90 to enter, allocating 40% to NVDA, 20% to AMD (as a diversified play), and keeping 40% in cash to buy dips.

Risks to Watch

  • Export Escalation: Further U.S. restrictions could deepen Nvidia’s China revenue losses.

  • Economic Slowdown: A recession would hit AI capex, slowing Nvidia’s growth (analysts expect 51% earnings growth in 2026, down from 114% in 2025).

  • Competition Surge: Huawei and AMD’s gains could pressure Nvidia’s margins further if pricing wars intensify.

Your Move?

Nvidia’s below $100, but the path forward is murky. Are you buying the dip at $90, starting small now, or waiting out the storm? Drop your strategies below—let’s tackle this together!

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  • YTGIRL
    ·04-22
    Buy the dip
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