Key Takeaways:
- Nvidia shares fell to $189, down 18% from the 2026 high.
- The sell-off erased nearly $1 trillion in market valuation.
- A bullish chart pattern is forming as a key valuation metric dips.
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Nvidia drops 18% to $189 support as $1 trillion in value erased
Nvidia Corp. shares slid to $189, down 18% from this year's high, erasing nearly $1 trillion in market value as the AI chip leader's sell-off deepened.
The stock is testing a critical support zone near $189, a level that previously acted as resistance before the breakout higher, according to technical analysis. The pullback has pushed the forward price-to-earnings multiple to its lowest level in months, a development that some traders interpret as a potential buying opportunity if the support holds. The valuation compression comes as Nvidia's revenue continues to grow at triple-digit rates, creating what chart analysts describe as a potential bullish divergence between price and earnings power.
The broader sell-off in technology stocks accelerated Wednesday, with Dow futures falling more than 500 points in early trading. The FTSE 100 slid over 1% as former President Donald Trump's remarks revived Middle East tensions, adding a geopolitical layer to the risk-off move. The Nasdaq 100 futures also pointed to a lower open, extending a week-long decline that has hit AI and semiconductor stocks particularly hard. The Cboe Volatility Index rose above 20 for the first time in weeks as traders priced in higher uncertainty and sought portfolio protection. The U.S. 10-year Treasury yield edged lower as investors rotated into safe-haven assets, while the dollar index held near recent highs.
Nvidia's 18% decline from its 2026 peak represents the stock's deepest correction since late 2025, when it briefly fell 22% before rebounding to new highs. The current drawdown has reduced Nvidia's market capitalization by roughly $1 trillion, bringing it to approximately $4.7 trillion based on the $189 share price. The stock remains up about 16% over the past 12 months despite the recent pullback, and it has gained more than 160% over the past five years as the AI boom propelled it from a gaming GPU maker to the world's most valuable semiconductor company.
The sell-off has rippled across the semiconductor sector. Micron Technology, which has surged about 240% this year on AI-driven memory demand, has also pulled back from its highs. Cerebras Systems, the AI chip startup that went public this year, has dropped 33% since its IPO as investors scrutinize profitability and execution risks. Navitas Semiconductor fell 9% in Wednesday's pre-market trading, extending losses for the power chip maker. The broad-based decline suggests the AI trade is undergoing a rotation rather than a structural unwind, with capital flowing toward value-oriented sectors while growth and momentum names take a breather.
The $189 level is now the most-watched technical threshold for Nvidia traders. A bounce from this support would confirm the bullish pattern — likely a descending wedge or flag formation — that the source article references. A breakdown below $189, however, could open the door to a test of the $170 area, where the stock found support during its late-2025 correction. Nvidia's next quarterly earnings report, expected in August, will provide the next major event that could determine the stock's near-term direction. Until then, the stock's trajectory will depend on broader market conditions and any updates on AI infrastructure spending from the hyperscaler customers that account for a growing share of Nvidia's data center revenue.
This article is for informational purposes only and does not constitute investment advice.
