What's Going On With NVIDIA Stock Tuesday?

NVIDIA Corp. (NASDAQ:NVDA) stock fell about 2% Tuesday, underperforming the broader technology sector despite strength in chip and growth stocks.

The Nasdaq gained 0.16%, while the S&P 500 fell 0.38%. Technology rose 0.57%.

NVIDIA Lags Technology Sector

NVIDIA’s decline comes as investors rotate within the market. Only four of 11 sectors were higher Tuesday, while the advance-decline ratio stood at 0.6.

Utilities gained 1.08%, reflecting demand for more defensive areas of the market.

NVIDIA also lagged its technology peers by roughly 2.5 percentage points. The sector ranked second among the 11 major sectors Tuesday.

Technology has gained 1.11% over the past 30 days and 6.66% over the past 90 days. Therefore, NVIDIA’s decline stands out against the sector’s broader strength.

Technical Picture Remains Bullish

Despite Tuesday’s pullback, NVIDIA remains above its 20-day, 50-day, 100-day and 200-day simple moving averages.

The 20-day SMA of $220.49 remains above the 50-day SMA of $211.23. The 50-day average also sits above the 200-day SMA of $196.90. That structure points to a continued longer-term uptrend.

Momentum also remains constructive. The MACD is above its signal line, while the histogram is positive. That suggests momentum has improved despite the latest decline.

The stock remains near the upper end of its 52-week range of $164.07 to $236.54.

Traders may watch $228 as near-term resistance. The $190-$197 area could provide longer-term support, with the 200-day SMA currently at $196.90.

Analyst Outlook

NVIDIA carries a Buy consensus rating with an average price forecast of $349.15.

Rosenblatt maintained a Buy rating and $390 price forecast on Sept. 4. Needham maintained its Buy rating and $300 forecast the same day. Citigroup raised its price forecast to $315 from its previous level on Aug. 27 while maintaining a Buy rating.

Benzinga Edge Rankings

The Benzinga Edge scorecard highlights NVIDIA’s strong growth and quality profile.

NVIDIA scores 98.07 for Growth, 97.37 for Quality and 84.79 for Momentum. However, its Value score is just 6.74.

The rankings suggest strong growth and business quality continue to support the stock. However, its weaker valuation score leaves investors focused on execution and future growth.

ETF Exposure

NVIDIA has a 9.73% weighting in the Franklin Focused Dynamic Growth ETF (NASDAQ:FFOG). It also represents 9.79% of the First Trust Innovation Leaders ETF (NYSE:ILDR) and 9.94% of the Xtrackers Net Zero Pathway Paris Aligned U.S. Equity ETF (NYSE:USNZ).

Large weightings can make NVIDIA sensitive to fund flows into and out of these ETFs.

NVDA Price Action

NVDA Price Action: NVIDIA shares were down 1.94% at $225.90 at the time of publication Tuesday, according to Benzinga Pro.

Image via Shutterstock