Nvidia Shares Face Diverging Views as AI Optimism Meets Caution

As November 2025 draws to a close, Nvidia finds itself at the center of a heated market debate. While some investors continue building positions, others are sounding alarm bells about potential trouble ahead. Despite robust quarterly performance, one of Wall Street’s most prominent short sellers has issued a stark warning about a possible market crash—ironically triggered by the very artificial intelligence boom that propelled Nvidia’s rise.

Technical Indicators Show Vulnerability

From a chart perspective, Nvidia’s stock appears to be testing critical support levels. The $177 mark—where the 200-period moving average resides on the four-hour chart—is currently being vigorously defended. Should this level fail, analysts project a potential decline toward $162, where the 200-day moving average converges with Fibonacci retracement levels.

Resistance poses significant challenges on the upside, with substantial barriers emerging at $186 and $195. Momentum indicators present conflicting signals: shorter-term metrics lean bearish while longer-term averages maintain their bullish orientation.

Institutional Investors Seize Buying Opportunities

Even as the stock retreated approximately 20% from its recent peaks during November, major asset managers capitalized on the weakness to establish new positions. GHP Investment Advisors Inc. substantially increased its holding during the second quarter, boosting its position by 45.2%—a clear indication that not all market participants are abandoning the Nvidia narrative.

These investors operate on a straightforward premise: the current price pullback offers an attractive entry point for those with long-term horizons. Fundamental data supports this perspective, with third-quarter revenue surging 62.5% to $57.01 billion. Earnings per share reached $1.30, comfortably exceeding analyst expectations of $1.23.

Should investors sell immediately? Or is it worth buying Nvidia?

Short Seller Warns of Debt-Fueled AI Bubble

Jim Chanos, the legendary short seller, presents a decidedly different outlook. He cautions that the breakneck expansion of AI infrastructure could potentially trigger a broader market collapse. His reasoning carries significant weight:

Chanos’ Central Arguments:
– Major Nvidia clients including Meta and xAI are financing substantial chip purchases through off-balance-sheet debt
– Current demand stems more from speculative hope than demonstrated revenue generation
– If AI investments fail to yield returns by 2027/2028, orders could evaporate abruptly
– The entire market structure rests on what he characterizes as “weak foundations”

The essence of his warning suggests that if massive artificial intelligence investments don’t deliver expected returns, the repercussions would extend far beyond Nvidia, potentially dragging down the entire technology sector.

The critical question remains: which perspective will prove accurate—that of accumulating institutional investors or the cautionary stance of the short seller? The answer will likely emerge over coming months as the AI revolution either delivers on its promises or falls short of expectations.