Nvidia Stock Forecast as CoreWeave, Nebius, IREN, Marvell Reverse

Key Insights

• Nvidia stock price has pulled back by 17% from the year-to-date high.
• Some of the top portfolio stocks are in a strong freefall this year.
• The stock has formed a falling wedge, pointing to a rebound.

Nvidia stock is facing some major headwinds, which have pushed its shares below the crucial support of $200. It has dropped by over 17% this year, with its market capitalization falling from $5.71 trillion to $4.71 trillion. This retreat may continue as some of its top portfolio companies plunge.

CoreWeave, Nebius, IREN, Lumentum, and Marvell have plunged

Nvidia has made some major investments this year. It has pumped over $18 billion in public and privately owned companies. In most cases, it has invested $2 billion in these companies, which include neocloud names like CoreWeave, Nebius, and IREN. It also invested in companies like Lumentum and Marvell Technology.

There are signs that the value of some of these companies has started to plunge. Neocloud stocks have dived and moved into a bear market. CoreWeave, which Nvidia owns 11% of, has dropped by more than 50% from its peak last year. It has now dropped to the lowest level since April 6 this year.

Nvidia also invested $2 billion in Nebius, which has dropped by over 28% from its highest point this year. IREN, a Bitcoin mining company and a neocloud, has also slumped by 50% from its last year’s peak.

These stocks plunged this week amid reports that Meta Platforms was experiencing spare capacity in its data center. It now plans to monetize this capacity, a move that has turned one of the biggest potential clients into a competitor.

The new developments comes as the company continues to see a weaker return on investment in the industry. Meta AI, its Claude and ChatGPT competitor, has not gained a substantial market share in the industry.

The companies are also seeing substantial competition from SpaceX. It recently inked a $1.25 billion-a-month deal with Anthropic, a $150 million partnership with Reflection AI, and another $950 million a month from Google.

Therefore, there are concerns about whether these companies will continue their growth momentum this year.

Other companies Nvidia has invested in, such as Marvell and Lumentum, have pulled back. Marvell, which Jensen Huang believes is the next $1 trillion company, has dropped by over 25% from its highest point this year. Lumentum has dropped to $728 from the year-to-date high of $1,086.

OpenAI Jitters Remain

Nvidia stock has also come under pressure from OpenAI, the AI company it recently invested in. Recent reporting suggests that the company is considering handing the US a 5% stake, a move aimed at improving its relationship with the government.

OpenAI is also considering delaying its IPO as the management remains concerned about its valuation. Unlike Anthropic, OpenAI’s growth has slowed, and investors are worried that a $1 trillion market cap will not hold in the long term.

Nvidia recently invested in OpenAI, and a public listing would help it realize its returns.

There is a risk that OpenAI will slow its data center buildout as it focuses on profitability ahead of its IPO. One approach is for it to start using its own chip that is being manufactured by Broadcom.

Nvidia Stock Price Technical Analysis

Despite its major headwinds, there are signs that Nvidia stock has some more upside to go in the near term. The most important bullish case is the fact that it formed a giant falling wedge pattern, with its two lines nearing the convergence.

The stock has also remained above the 200-day moving average, while the Stochastic Oscillator has formed a bullish divergence. Therefore, the shares will likely rebound in the coming months as investors target the all-time high.

This view is supported by what analysts predict. The average estimate is that it will jump to $303, which is substantially higher than where it is today. Some analysts have a more bullish outlook, with Baird’s Tristan Gerra predicting that it will hit $500.

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