Nvidia Stock Price Forecast Amid the Ongoing Data Center Cancellations

Key Insights

• Nvidia stock price has retreated by 15.5%.
• There are concerns about the ongoing data center cancellations.
• The next key catalyst for the shares will be Micron’s upcoming earnings.

Nvidia stock price has pulled back by 15.5% from its highest point this year. This happened as concerns about growing competition and data center cancellations remain. NVDA stock also dropped to the crucial support level of $200 as investors wait for Micron’s upcoming earnings.

Nvidia Stock Has Slumped Amid Data Center Cancellations

Nvidia stock price has remained in a local technical correction this month as concerns about data cancellations rise. A recent report showed that data center projects worth over $64 billion have either been canceled or delayed.

At the same time, Americans are becoming increasingly concerned about having data centers in their communities. That’s because of the rising energy bills and noise levels.

According to BallotPedia, voters in at least six states will vote on data centers in their states. Four of these votes will be to limit the development of data centers, while the others will be to allow these centers.

The situation for data centers is also getting worse. A recent Emerson College poll of 2,000 people in Pennsylvania showed that 42% of the respondents would oppose a data center in their neighborhood.

Complicating the data center situation is the fact that investors are starting to question the return on investment by the top companies. A good example is that the top companies in the sector, which are all major Nvidia customers, have pulled back this year.

Microsoft’s stock has slumped by over 30% from its highest point last year. Meta Platforms has also dropped by 30%, while Amazon has fallen by 15% in the same period.

Each of these companies is spending over $100 billion on data centers this year. As a result, there are concerns that some of these companies will start reducing their capital expenditures.

At the same time, there are concerns that some newly launched chips will affect its growth in the future. Google is intensifying the rollout of its TPU chips, while Amazon is building its Tranium chips. Microsoft is also working on its Maia chips, while Meta has its MTIA chips.

Micron Earnings Report Ahead

The next key catalyst for Nvidia’s stock is the upcoming Micron earnings. That will provide more color on the state of the AI industry.

Micron has become a major player in the industry, where it is the third-biggest player in the high bandwidth memory (HBM) sector. Notably, it is a top supplier to Nvidia, where it provides chips for its GPUs and the upcoming CPU.

The company may publish strong financial results and issue solid guidance. If this happens, it will be a highly bullish sign for the entire sector.

Analysts anticipate that the company’s revenue will come out at $35 billion. It was up by 279% from the same period last year. Its annual revenue will jump by 205% to $114 billion.

Recent history shows that investors are highly sensitive to AI earnings. For example, late last month, Nvidia and other top players in the AI industry plunged after Broadcom published its earnings.

Nvidia Stock Price Technical Analysis

The daily chart shows that the NVDA stock price has slumped in the past few days. It moved from a high of $236 to the current $200. It has now dropped below the 50-day Exponential Moving Average (EMA).

The stock also formed a descending channel, a sign that bears have prevailed. Also, the Moving Average Convergence Divergence (MACD) has continued falling and has just crossed the zero line.

Therefore, the stock will likely remain under pressure in the past few days as concerns about the AI industry remain. If this happens, it may drop to the 200-day moving average of $188.

In the future, however, there is a likelihood that the stock will bounce back as bulls target the year-to-date high of $236. A move above that price will point to further gains.

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