NVIDIA Corporation (NVDA) Stock Decline Analysis - February 3, 2026

Based on the comprehensive data gathered, I will now provide a systematic analysis of Nvidia’s stock decline and its implications.

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NVIDIA Corporation’s stock experienced a significant intraday decline of

(down $8.00) to close at , marking the largest single-day drop since November 25, 2025. The selloff was primarily driven by growing uncertainty surrounding the company’s strategic partnership with OpenAI and broader concerns about AI infrastructure spending sustainability. The Technology sector, of which NVIDIA is a cornerstone component, suffered the steepest decline among all sectors at on the trading day [0][1].

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The

for the selloff stems from reports regarding tensions between NVIDIA and OpenAI:

• Investment Deal Concerns
  : The Wall Street Journal reported that NVIDIA’s planned
  $100 billion investment
  in OpenAI had stalled after internal doubts emerged within NVIDIA about the commitment [1][2]. While CEO Jensen Huang subsequently stated the company intends to make a “huge investment,” he clarified it would be “one step at a time” rather than a committed $100 billion tranche [1].

• Chip Satisfaction Issues
  : Reuters reported that OpenAI has been
  dissatisfied with NVIDIA’s latest AI chips
  for certain inference tasks since last year, citing eight unnamed sources. The company allegedly explored alternatives including partnerships with
  Cerebras and Groq
  to enhance inference performance [1][3].

• Competitive Dynamics
  : While NVIDIA maintains dominance in AI model training, the
  inference segment
  (serving AI responses to users) is becoming increasingly competitive with Application-Specific Integrated Circuits (ASICs) gaining traction over general-purpose GPUs [1].

• Clarification Efforts
  : OpenAI CEO Sam Altman attempted to calm markets via social media, stating: “We love working with NVIDIA, and they make the best AI chips in the world. We hope to be a gigantic customer for a very long time.” [1][4]

The DCF valuation analysis reveals significant

despite NVIDIA’s market leadership:

Scenario	Fair Value	Premium/Discount to Current
Conservative	$67.44	-62.0%
Base Case	$85.01	-52.1%
Optimistic	$111.52	-37.2%
Probability-Weighted	$87.99	-50.5% downside

The DCF analysis indicates that the current price of

significantly exceeds all reasonable fair value scenarios, with the probability-weighted valuation suggesting approximately [0][5].

Multiple technical indicators are flashing cautionary signals:

• MACD
  : Death cross formation with the MACD line below the signal line, indicating bearish momentum [0]
• KDJ Indicator
  : Bearish configuration with K=49.5, D=64.1, J=20.3 [0]
• RSI
  : Currently at
  41.73
  , approaching oversold territory but not yet at extreme levels [0]
• Price Action
  : Trading within a defined range between
  $175.29 (support)
  and
  $186.06 (resistance)
  [0]
• High Beta
  : Stock exhibits a
  beta of 2.31
  versus SPY, making it significantly more volatile than the broader market [0][5]

The semiconductor selloff occurred amid multiple macro headwinds:

• Chinese Economic Concerns
  : Weak Chinese PMI data contributed to risk-off sentiment globally [6]
• U.S. Political Uncertainty
  : Partial U.S. government shutdown created additional uncertainty [6]
• Sector Rotation
  : Defensive sectors (Consumer Defensive +1.89%, Energy +1.19%) outperformed while risk assets retreated [1]

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NVIDIA’s valuation remains elevated despite the pullback:

Metric	Current Value	Historical Context
P/E Ratio (TTM)	43.64x	Above historical semiconductor averages
P/B Ratio	36.41x	Extremely high for any sector
P/S Ratio	23.15x	Reflects growth expectations
Market Cap	$4.32 trillion	Among world’s largest companies
EPS (TTM)	$4.01	Strong but not supporting current price

The DCF analysis incorporates a

, reflecting:

• Beta of 2.31
  (high volatility premium)
• Risk-free rate of 4.5%
• Market risk premium of 7.0%
• Cost of debt of 2.4%

This elevated discount rate significantly compresses fair value estimates, particularly for a company whose growth is heavily tied to capital-intensive AI infrastructure buildouts [5].

The base case DCF scenario assumes:

• Revenue growth of 67.3%
  (5-year CAGR)
• EBITDA margin of 44.6%
• Terminal growth rate of 2.5%

While these assumptions reflect historical performance, analysts question whether such growth rates can be sustained as:

• AI infrastructure spending matures
• Competition intensifies from AMD, Cerebras, Groq, and custom silicon providers
• Hyperscalers (Microsoft, Google, Amazon, Meta) develop in-house chip capabilities [5]

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The immediate market reaction reflects:

1. Heightened Uncertainty
   : Investors are re-assessing the NVIDIA-OpenAI relationship’s strategic importance
2. Momentum Reversal
   : The stock has declined
   7.03% over the past week
   and
   4.90% over the past month
   , breaking recent uptrend momentum [0]
3. Volume Confirmation
   : Trading volume of
   156.89 million shares
   exceeded the 180-day average of 181.42M, indicating conviction behind the move [0]
4. Sector Leadership Erosion
   : As the flagship AI semiconductor play, NVIDIA’s weakness dragged down the entire Technology sector [1]

Based on trading patterns and commentary flow:

• Institutional investors
  appear to be reducing exposure amid valuation concerns
• Retail sentiment
  remains mixed, with some viewing the dip as a buying opportunity while others take profits after the stock’s extraordinary multi-year rally
• Options market
  activity suggests increased hedging activity and uncertainty about near-term direction

NVIDIA’s decline has broader ramifications for semiconductor sentiment:

Factor	Impact on Sector
AI Infrastructure Spend Concerns	Negative - questions sustainability of capex cycle
Competitive Pressure	Mixed - validates concerns about market share
Hyperscaler Independence	Negative - potential demand destruction from custom chips
Overall Risk Appetite	Negative - high-beta stock drag effect

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Level	Type	Price	Significance
$212.19	52-Week High	$212.19	All-time high (prior resistance)
$186.06	Resistance	$186.06	Recent trading range top
$177.62	Current	$177.62	Current price level
$175.29	Support	$175.29	Key technical support
$86.62	52-Week Low	$86.62	Year-to-date low

:

• Breakdown below $175.29 support
• Continuation of OpenAI partnership concerns
• Broad semiconductor sector weakness
• Repricing of growth expectations

:

• Continued sideways consolidation
• Partnership clarity emerges
• Strong AI demand remains intact
• Stock stabilizes near current levels

:

• Partnership reaffirmation with concrete investment details
• Strong quarterly guidance
• AI spending acceleration from hyperscalers
• Break above $186.06 resistance

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1. Partnership Developments
   : Any formal announcement regarding the OpenAI investment status
2. Competitive Landscape
   : AMD’s MI300 series trajectory, custom silicon adoption rates
3. Hyperscaler Capex
   : Microsoft, Google, Amazon, and Meta capital expenditure guidance
4. Macro Conditions
   : Interest rate environment, recession risk, China demand
5. Supply Chain
   : Taiwan Semiconductor capacity constraints, CoWoS packaging availability
6. Valuation Reset
   : Market repricing to align with DCF-derived fair values

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NVIDIA’s 4.31% decline on February 3, 2026, represents a confluence of

, , and that has challenged investor confidence in the semiconductor sector’s AI-driven rally. While CEO Jensen Huang and Sam Altman have attempted to reassure markets about the strength of their relationship, the underlying concerns about AI infrastructure spending sustainability and intensifying competition in the inference chip market are likely to persist.

From a valuation perspective, the DCF analysis suggesting approximately

from current levels indicates that significant price correction may be necessary to align the stock with fundamentals. The high beta (2.31) and current technical setup (death cross, bearish KDJ) suggest continued volatility in the near term.

For the semiconductor sector broadly, NVIDIA’s decline serves as a reminder that even market leaders are not immune to sentiment shifts and valuation reassessments. Investors should monitor the OpenAI partnership developments closely, as clarity on this strategic relationship could either stabilize the stock or trigger further downside.

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[0] Ginlix AI Financial Data Platform - Real-time quotes, technical analysis, and market data (accessed February 3, 2026)

[1] Benzinga - “Why OpenAI Is Unhappy With Some Nvidia Chips And Searching For Alternatives” (https://www.benzinga.com/markets/tech/26/02/50348212/why-openai-is-unhappy-with-some-nvidia-chips-and-searching-for-alternatives)

[2] Reuters - Original report on OpenAI-NVIDIA partnership concerns

[3] PCGamesN - “OpenAI could ditch Nvidia GPUs, handing a lifeline to PC gamers” (https://www.pcgamesn.com/nvidia/openai-ditching-gpus)

[4] PYMNTS - “OpenAI Denies Report of Dissatisfaction With Nvidia AI Chips” (https://www.pymnts.com/news/artificial-intelligence/2026/openai-denies-report-dissatisfaction-with-nvidia-ai-chips/)

[5] Ginlix AI DCF Valuation Module - NVIDIA Corporation analysis (accessed February 3, 2026)

[6] TipRanks - “Why Is the Stock Market Down Today, 2/3/26?” (https://www.tipranks.com/news/why-is-the-stock-market-down-today-2-3-26)