Nvidia (NVDA) shares have slipped into a local correction, slumping 14.26% from their highest point in October and underperforming the broader market. The retreat has coincided with a wider pullback across artificial intelligence (AI) stocks and falling valuations at Nvidia's most prominent portfolio companies, OpenAI and Anthropic. Attention now turns to Advanced Micro Devices (AMD), which publishes its financial results on Tuesday and may shed fresh light on the health of the data center industry. The overlap matters because Nvidia's record highs were set during the same AI buildout now under valuation scrutiny, tying the chipmaker's story to the fortunes of the very companies being marked down.

Anthropic Is Considering Slashing Its Valuation

Anthropic, the world's largest private company, is facing mounting challenges. Its recently released S-1 document showed that revenue growth, while still strong, was starting to lose momentum. The filing also disclosed a large loss and outlined plans to spend billions of dollars on its AI rollout in the coming years. An S-1 is the registration filing a company must submit to regulators before its shares can list publicly, giving investors their first detailed look at a previously private firm's finances.

As a result, the company is considering reducing its valuation metrics as it prepares to go public. According to the Wall Street Journal (WSJ), its investors are recommending a valuation target of between $1.5 trillion and $1.6 trillion.

A similar trend appears on Polymarket, a prediction market where users trade on real-world outcomes, where market participants are assessing the possibility of Anthropic reaching a $1.5 trillion valuation by December 31. Such a valuation could also influence Nvidia, given its investment exposure to Anthropic.

OpenAI Slashed Its Valuation After Its Fundraising Flopped

Meanwhile, OpenAI, the creator of ChatGPT, recently slashed its valuation from $1.4 trillion to $1.25 trillion as its investors pushed back. The company had been targeting a capital raise of $30 billion, but instead received $11 billion from investors.

A $1.4 trillion valuation would have generated more value for Nvidia, a company that has invested over $30 billion in OpenAI.

These events are unfolding as investors remain concerned about the valuations of AI companies more broadly. For example, Firmus, a data center company, recently pulled its initial public offering after investors raised concerns about its valuation.

The same pressure is visible among companies that Nvidia has invested in. On Monday, Marvell Technology and Lumentum stocks tumbled by double digits after announcing a mega merger, with Lumentum dropping because the $115 billion combination will be financed by Marvell stock. Top neocloud companies in which Nvidia has invested, including popular names like CoreWeave, IREN, and Nebius, have all plunged in the past few months. Taken together, the shortfall at OpenAI, the shelved Firmus listing, and the slide in neocloud shares show valuation scrutiny running through private fundraises, public listings, and listed AI infrastructure names at the same time.

AMD to Publish Its Earnings

Nvidia stock has mostly underperformed the market during this earnings season. It dropped last week when Intel reported results showing that its business deteriorated last quarter.

The next important company to watch is Advanced Micro Devices, which will report its numbers on Tuesday. As Nvidia's closest competitor in data center processors, AMD's results carry read-through value for the broader chip sector. These results will provide hints on the health of the data center industry and whether the company is gaining market share. Yahoo Finance data show that analysts expect AMD's revenue to jump 41.6% in the third quarter to $13 billion. If its earnings are strong, they may help boost other big names in the AI industry, including Nvidia.

Nvidia Stock Price Technical Analysis

The daily chart shows that the NVDA stock price suffered a big reversal after hitting a record high of $243 in October. It has made a series of lower lows in this period, with bears stepping in whenever it attempted to bounce back.

The stock is now trading between the 38.2% and 50% Fibonacci Retracement levels. It has also slumped below the 50-day moving average, a sign that bears remain in control. Therefore, the most likely NVDA stock forecast is bearish, with the next level to watch at $200.

However, there is also a possibility that the stock will rebound after the US midterm elections as investors buy the dip. Such a move may see it rally to $220.

This article provides market information, not investment advice. Stock investing involves volatility and potential capital losses.