Nvidia Stock Drops 9% Amid Anthropic Growth Slowdown and Rising Wedge Pattern

Key Insights

• Nvidia stock has dived in the past few weeks, moving from a high of $243 to $220 today.
• There are signs that Anthropic’s and OpenAI’s revenue growth has slowed.
• The stock has formed a rising wedge pattern on the daily chart.

Nvidia stock dropped below a crucial support level this week as investors continued dumping their artificial intelligence stocks. NVDA dropped to $220, down modestly from the all-time high of $243. This retreat may continue as it has formed a rising wedge pattern. It may also be affected by reports that Anthropic and OpenAI’s revenue is slowing.

There are signs that the artificial intelligence (AI) industry is slowing this year. A recent report showed that OpenAI’s annualized revenue was below $50 billion. Before that, the company had leaked to the media that its revenue reached $70 billion.

Now, according to the FT, Anthropic has told its investors that its revenue rose by nearly 50% in the last quarter. It jumped to $16.8 billion, and it had already turned a profit in adjusted terms.

The revenue growth is substantial. However, it is also much lower than analysts expected. It was also slower than the blistering pace it set earlier this year and below the expectations of its earlier backers. Analysts are projecting that its annualized revenue through September soared to $74 billion.

Signs that its revenue is slowing would send shockwaves in the artificial intelligence (AI) industry. For one, there are signs that competition is soaring in the industry. Most of this competition is coming from open-weight companies like Alibaba, DeepSeek, and Moonshot.

Nvidia is exposed to the slowdown for two main reasons. First, it is a big investor in the company. As such, that slowdown may hinder its goal to hit a $2 trillion valuation when it launches its IPO. Second, the company is one of the top spenders on its chips.

Nvidia stock has slumped because of the ongoing concerns that the artificial intelligence bubble is about to burst. Ray Dalio has warned that the rising interest rates may become the catalyst that causes this bubble to burst.

Indeed, some of the top companies are now paying substantial sums to repay their debts. For example, CoreWeave’s bonds are now commanding a 15% annual return, which is substantial.

At the same time, Oracle’s yields have continued rising as it faces challenges in its Project Jupiter project. The bursting of the AI bubble would have a major impact on its business.

Meanwhile, Gartner is warning that some of Nvidia’s portfolio companies will need to announce large impairments by the end of 2030. This includes companies like Nebius, CoreWeave, and IREN, which are spending billions of dollars.

Nvidia is also facing major competition from some of the biggest companies in the United States. Microsoft has launched Azure Maia 300, which it believes is doing better than other chips. Google is boosting its TPU output, while Amazon’s Tranium is doing relatively well.

These chips will not have a big impact on Nvidia’s business for now, but they may do so in the future.

The daily chart also explains why the NVDA stock has plunged in the past few days. This retreat is happening after it formed a rising wedge pattern, which is made up of two ascending and converging trendlines. A bearish breakout typically occurs when the two lines are nearing convergence.

The stock has now moved below the lower side of the wedge pattern. At the same time, the Relative Strength Index (RSI) and the MACD have all pointed downwards. Therefore, the stock will likely continue falling as sellers target the key support level of $200.

This article is for informational purposes only and does not constitute financial or investment advice.

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