Nvidia (NVDA) shares remained under pressure after Alphabet reported quarterly results that fell short of expectations and Marvell Technology reportedly entered acquisition talks with Lumentum. NVDA closed at $215.38 on Oct. 28, down 11.5% from its October peak and roughly 12% below its highest point of the year.

The developments have raised questions about AI infrastructure spending and semiconductor valuations. Meanwhile, Intel's upcoming earnings could further shape expectations for Nvidia's technology investments.

Alphabet's Weak Results Deepen AI Concerns

Nvidia stock retreated as investors grew increasingly concerned about the AI industry. Those concerns escalated overnight after Alphabet published numbers that missed expectations.

Alphabet said revenue rose to $111.2 billion in the September quarter, as its advertising and search businesses disappointed. The company's AI business also continued to face challenges, fueling worries about the industry's return on investment (ROI).

The results carry outsized significance because Google is often viewed as a bellwether for the AI industry. It owns DeepSeek, one of the top AI labs in the world, and TPU, among the fastest-growing chips in the sector. Alphabet is also one of Nvidia's biggest customers, and the financial health of a buyer of that size is closely read as a gauge of demand for Nvidia's chips.

The report came days after Microsoft said it was offering buyouts to 60,000 employees, one of the biggest layoffs on record. In its earnings report, Microsoft also flagged a slowdown in its data center rollout in the United States.

Amazon, another top Nvidia client, is expected to publish its financial results later today, providing further hints on its business trends. Whether its commentary on data center plans echoes the slowdown Microsoft flagged is one of the details readers can watch for in the release.

Marvell Technology in Talks to Buy Lumentum

A second development that could affect Nvidia involves a potential merger between two companies in its portfolio. Marvell Technology, which partners with the likes of Amazon and Google in building their chips, is considering a purchase of Lumentum, a leading player in the optics business. Optical components carry data over the fiber links that connect servers and data centers, placing that segment inside the same infrastructure buildout as AI chips.

If completed, the transaction would rank among the largest of the AI era. Lumentum is worth more than $88 billion, and Marvell would need to spend about $100 billion to execute the deal.

The potential transaction matters for Nvidia because it is a top investor in both companies. Jensen Huang, Nvidia's chief executive, has claimed that Marvell will one day become a $1 trillion company on the strength of rising demand for its products. If the deal is confirmed, Marvell shares could come under pressure, while Lumentum's could surge.

Another catalyst for Nvidia stock will be Intel's upcoming earnings, due after the market close. Nvidia is the third-biggest Intel shareholder, with a stake valued at more than $20 billion. Only BlackRock, Vanguard, and State Street hold larger stakes in Intel.

Intel's results will provide additional hints about the AI industry. A strong report would offer clues about whether the sector is thriving. Read alongside Amazon's numbers, the two releases would amount to a same-day snapshot of conditions across the AI hardware chain.

Nvidia Stock Technical Analysis

The daily chart shows that NVDA has been in a strong sell-off in recent days, dropping from a high of $243 to the current $215.

The stock remains above the ascending trendline that connects the lowest swings since March of this year. It also trades above the 100-day Exponential Moving Average (EMA), a sign that the upward trend is still intact.

However, the shares have also formed a bearish pennant pattern, which often leads to a continuation of the preceding move. That leaves open the risk of further declines, potentially toward the 200-day moving average at $205. A move above the resistance level of $205 would invalidate the bearish outlook.

Disclaimer

This article is for informational purposes only and does not constitute financial advice. Equity investments involve volatility and potential losses. Readers should conduct independent research before investing.

Originally published on The Market Periodical.