Nvidia (NASDAQ: NVDA) continues to struggle in retesting its all-time high as the company faces significant operational headwinds and technical resistance. The stock’s inability to break through previous peaks reflects growing market caution despite the firm's robust financial performance.

Major Headwinds Emerge

The company contends with increasing calls to slow down AI development, a shift that could impact its core business. Jensen Huang and President Donald Trump have insisted that the AI industry must continue growing to maintain the US lead against China. However, concerns about the data center industry are leading to project delays or cancellations. Oracle (NASDAQ: ORCL) faces delays on Project Jupiter, a 14,000-acre data center in New Mexico, due to environmental concerns.

Competition in the GPU industry is also intensifying. OpenAI has developed its Jalapeno chip in collaboration with Broadcom (NASDAQ: AVGO). Sam Altman stated that the chip beats Nvidia’s offerings in some metrics. Additionally, major clients Microsoft (NASDAQ: MSFT), Meta Platforms (NASDAQ: MSFT), and Amazon (NASDAQ: AMZN) are building their own chips. These big-tech companies account for about 50% of Nvidia’s revenue. Smaller firms like SambaNova, Euclyd, and Etched have received millions in investments to challenge Nvidia, including a recent investment by Samsung Electronics in Euclyd.

Nvidia’s stock is also pressured by retreats from companies it has invested in, such as neocloud providers CoreWeave, Nebius, and IREN, which have slipped into a bear market. On the positive side, Nvidia’s second-quarter revenue more than doubled. Management expects revenue to grow by more than 77% in the next financial year. The company may benefit from an upcoming Trump-Xi meeting in Washington, where a deal to sell advanced chips to China could accelerate revenue growth. Nvidia trades at a forward price-to-earnings ratio of 23, lower than its five-year average of 58.

Technical Pattern Risks

The daily chart shows NVDA has formed a rising wedge pattern, consisting of two ascending and converging trendlines. This pattern typically leads to a strong bearish breakout. The stock has retested the lower side of this pattern, confirming a break-and-retest scenario. The Relative Strength Index (RSI) has formed a bearish divergence pattern. There is a risk that the stock will resume its downward trend, potentially reaching this month’s low of $209.

What the Numbers Show

Nvidia’s valuation appears compressed relative to its historical average, trading at a forward P/E of 23 compared to a five-year average of 58. This discount persists despite management guiding for over 77% revenue growth in the next fiscal year, suggesting the market is pricing in significant risk from competitive pressures and potential demand slowdowns rather than current financial performance.

Nvidia Corp (NASDAQ: NVDA) CEO Jensen Huang rejected calls to slow artificial intelligence development, arguing that companies should advance rapidly while ensuring product safety before release.

In a teaser video shared by CBS News, Huang told correspondent Jo Ling Kent that the industry should move "as fast as we can, irrespective of anybody else." He clarified that speed does not mean shipping unsafe technology, emphasizing that products must be ready before launch. Huang framed rapid progress as vital for U.S. economic growth and prosperity.

Industry Debate on Pacing

Huang’s stance contrasts with recent comments from Anthropic CEO Dario Amodei, who argued that AI is advancing at an "exponential" rate and urged an industry-wide slowdown to match safety measures. Amodei called for independent third-party evaluators to assess safety practices and common standards.

Former Anthropic researcher Jacob Coxon also raised concerns that AI companies prioritize innovation over security, advocating for stronger safeguards as capabilities grow.

Meanwhile, Meta Platforms Inc (NASDAQ: META) CEO Mark Zuckerberg noted that his company delayed its Muse AI agent for several months to address safety and security concerns. Zuckerberg stated that every lab has the responsibility to train models safely at the required pace.

Market Reaction

Nvidia shares closed at $222.27 on Friday, up 1.34%. The stock edged 0.12% higher to $222.53 in after-hours trading. According to Benzinga Edge Rankings, Nvidia ranks in the 98th percentile for Growth.

The full interview with Huang will be released on Sunday.