Nvidia, Microsoft, S&P 500 Hold as AI Stocks Slip

Nvidia remains in the center of the move. The stock closed at $214.13 on Oct. 16, down from $221.30 two sessions earlier and well below its 50-day moving average of $222.96, a sign the recent pullback is testing near-term technical support. The RSI at 32.9 points to a market that is getting oversold but not yet washed out, while the MACD has slipped below its signal line.

Microsoft, by contrast, is helping keep the market floor intact. The stock finished at $529.05, still above both its 50-day moving average of $505.37 and its 200-day average of $434.03, underscoring that investors continue to favor larger, cash-rich platforms over more speculative AI plays.

The broader S&P 500 is also holding up better than the AI trade. SPY closed at $763.25, close to its 50-day average of $767.40 and well above the 200-day average of $721.88, suggesting the market is not yet embracing a full risk-off unwind. That resilience is important for portfolio positioning because it signals that money is rotating within equities rather than abandoning them outright.

Adalytica’s AI sentiment snapshot shows the trade remains crowded even as enthusiasm cools. The AI gauge sits at 75, labeled Greed, while awareness is at 4, or Extreme Fear, indicating investors are still fixated on the theme even as the selloff deepens. Nvidia’s own earnings sentiment remains elevated at 80, but its awareness score of 29 suggests the market is becoming more cautious around the stock heading into the next catalyst.

For investors, the message is straightforward: AI exposure is no longer a single trade. The market is rewarding companies with durable cash flow and punishing names where the valuation depends on uninterrupted AI momentum, and that divergence could widen if debt, capex and margin pressure stay in focus.

The next test is whether the selloff in video AI stocks broadens into the rest of large-cap tech or stabilizes as buyers continue to lean on Microsoft and other index heavyweights. Any fresh guidance, financing news or a further deterioration in AI-linked sentiment could decide whether this remains a sector rotation or turns into a larger de-rating across the market.