Pullback in NVIDIA shares presents entry opportunity ahead of quarterly earnings reports

NVIDIA stock is currently trading at around $196.07, 8% down from its historical high of $216.43, set on April 27. This recent shift in market dynamics has been driven by a significant surge in competition from the company’s rivals, such as AMD and Alphabet. These firms are slowly creeping into NVIDIA’s territory, stealing its spotlight in artificial intelligence (AI) development and, consequently, investors’ interest and capital flows.

The loss of the Chinese market is another headwind. According to CEO Jensen Huang, the company’s share in the Asian AI accelerator industry has shrunk from 95% to nearly nothing due to the latest export restrictions. As a result, NVIDIA suffered a non-recurring loss of $5.5 billion related to adjusted production plans and reserve volumes.

Nevertheless, structural demand for the firm’s chips keeps growing. Major tech players are expected to spend over $700 billion in total on AI infrastructure this year. Morgan Stanley has just revised its outlook to a more ambitious goal of $800 billion. Huang himself noted that the order backlog for Blackwell and Vera Rubin chips, projected through 2027, amounts to $1 trillion.

That said, NVIDIA has no significant growth catalyst before the quarterly earnings report on May 20. The market will price the stock amid a lack of information. In case of any corrective impulse or overheated conditions, selling pressure is likely to persist.

Turning to the technical side, NVIDIA shares are now pulling back after hitting an all-time high of $216.43. The Chaikin Oscillator confirms bearish momentum. The indicator sits in the negative zone below the zero line, underscoring sellers’ dominance. The current price ($196.07) aligns with the 38.2% Fibonacci level, measured from the minimum on March 30. In other words, this appears to be a critical point that could stop the decline.

Keep in mind the following trading strategy:

Buy NVIDIA stock at current levels near $196.00. Place Take profit at $206.80 and Stop loss at $189.00.

The forecast is valid between May 6 and May 13, 2026.