Nvidia's stock selloff may be just beginning, even after shedding 30% from its peak

By Christine Ji and Tomi Kilgore

While shares of Nvidia look cheap on paper and on the charts, Wall Street analysts see more volatility ahead

Nvidia's relative strength index fell to 23.95 earlier this week, marking the stock's most oversold reading since June 2019.

Following Jensen Huang's resignation as CEO on Thursday, investors are left wondering if the steep selloff in Nvidia shares is a buying opportunity or a falling knife.

Shares of the chip maker (NVDA) have slid over 30% from their all-time high of $239.24 on Oct. 6 as the company comes under scrutiny for its corporate governance, potential relationship to China and lack of succession planning.

On the surface, the stock looks to be heavily discounted, as demand for Nvidia's products remains high. Bernstein analyst Stacy Rasgon projects Nvidia's revenue to surge 88% this fiscal year to $406.9 billion as the artificial-intelligence buildout continues. But even though shares are "extremely cheap," Rasgon isn't recommending investors to begin building a position at current levels. He downgraded the stock to market perform from outperform in a Thursday note.

"We see considerable uncertainty around further newsflow that is probably going to be coming down the pipe, as well as the ability of any new CEO to truly fill Jensen's shoes given how tightly he managed the direction of the business and its relationships with customers, suppliers, employees and the broader industry ecosystem," Rasgon said.

Ryan Hughes, founder and portfolio manager at Bull Oak, saw more of an opening for opportunistic buyers. "I look at this as a little bit like a Steve Jobs and Apple situation," Hughes told MarketWatch. "There's a tremendous amount of key-man risk, but the company is more than just one person."

The stock was down 5.5% in afternoon trading, but pared earlier intraday losses of as much as 14.3%.

While the stock could certainly go lower from here, Hughes believes Nvidia's long-term trajectory remains intact. "If your risk tolerance is high enough and if you're willing to accept the future probability for more volatility, then I would be strongly looking and considering at these levels," he said.

Oversold doesn't mean the selling is over

Nvidia's chart does present a contrarian buying opportunity, as the stock has become the most "oversold" in more than seven years. But history backs up what chart watchers like to say: Oversold doesn't mean over.

As a result of the stock's recent decline, the relative strength index has dropped below the key threshold of 30 for the first time since the "liberation day" tariff panic of April 2025. Earlier this week, RSI fell to 23.95, which is the lowest level seen since June 2019.

RSI is a momentum indicator that measures the magnitude of recent gains versus recent losses. When RSI drops below 30, it's seen as depicting an oversold condition, which just means the stock has suffered a historically extreme decline. This suggests sellers need to take a breather, which opens the door for buyers to take control. But there's another theory that says "oversold" is more of an ability than a condition, meaning it's a sign of underlying weakness.

Since June 2019, there have been five previous periods when Nvidia's RSI dropped below 30. It did so for just one day on April 4, 2025, and that day marked the year's closing low for the stock, at $94.31.

The other four oversold periods all occurred in 2022. The first was a five-day stretch that started Jan. 21, and the last was on Sept. 26, 2022. Any bounces in the stock after those occurrences were short-lived. The stock tumbled 51.9% from Jan. 21 until it bottomed on Oct. 14.

In 2019, the stock first became oversold on May 13 and dropped 15.7% before bottoming on June 3, when RSI hit a low of 18.8.

Should the stock fall below the March 30, 2026, closing low of $165.17, the next area of potential support would be in the range of $135 to $150, which was previous strong resistance for the stock from mid-2024 through mid-2025.

But it will take more than some lines on a chart to find a floor for the stock. It will require Nvidia to bring on a strong CEO who can inspire investors' confidence.

Nvidia remains an "exceptionally well-run organization with extraordinary engineering depth" and a robust ecosystem, Lior Prosor, managing partner at venture firm Deep33, said in a Thursday note. But he believes investors will want "several quarters of evidence" that Nvidia can execute under new leadership.

"Until then, even if the stock looks increasingly cheap on fundamentals, it may take time before buying that discount becomes an easy trade," Prosor added.

-Christine Ji -Tomi Kilgore

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11-12-26 1415ET