When the AI Hype Meets Gravity: Nvidia’s Next Big Test

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Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stock rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock’s performance over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will lose money if the underlying stock’s performance is flat, and it is possible that the Bull Fund will lose money even if the underlying stock’s performance increases, and the Bear Fund will lose money even if the underlying stock’s performance decreases, over a period longer than a single day. Investing in the Funds is not equivalent to investing directly in NVDA.

After a historic rally to new all-time highs, shares of NVIDIA Corporation (Ticker: NVDA) have begun to cool off in recent weeks. The broader uptrend remains intact, but traders are asking the big question: Has the stock simply hit a breather, or is the market starting to price in just how expensive the AI king has become?

AI Chip Dominance and the Data Center Boom

Nvidia continues to reign as the undisputed leader in AI acceleration, GPU performance, and end-to-end infrastructure. Its Hopper and Blackwell architectures, alongside CUDA, DGX Cloud, and NVLink networking, remain the backbone of nearly every major AI breakthrough.

From ChatGPT to self-driving cars, Nvidia’s full-stack dominance spans training, inference, and enterprise AI, making it indispensable to hyperscalers like Microsoft Azure, Google Cloud, Oracle, and Meta’s Llama 4 rollout. Its moat runs deep, built on thousands of CUDA-optimized libraries, years of developer loyalty, and partnerships with sovereign AI projects worldwide.

Record gross margins above 75%, data-center revenue up 154% year-over-year, and a forward roadmap that includes Blackwell Ultra and Rubin all paint a picture of continued leadership in a trillion-dollar global AI arms race.

For traders expecting continued upside, Direxion’s Daily NVDA Bull 2X Shares (Ticker: NVDU), which seeks daily investment results, before fees and expenses, of 200% of the performance of NVIDIA Corporation common stock (Ticker: NVDA).

Below is a daily chart of NVDA as of November 6, 2025.

Source: TradingView.com

Candlestick charts display the high and low (the stick) and the open and close price (the body) of a security for a specific period. If the body is filled, it means the close was lower than the open. If the body is empty, it means the close was higher than the open.

The performance data quoted represents past performance. Past performance does not guarantee future results.

Falling Behind on Demand?

Nvidia’s sky-high expectations mean that any slowdown can cause outsized reactions. Enterprise AI capex digestion, weaker PC and gaming demand, and potential export curbs have investors bracing for volatility*.

At the same time, AMD, Intel, and new AI-chip challengers are gaining ground, promoting open ecosystems and alternative architectures. Reports of delayed Blackwell ramp-ups have also stirred concern over near-term supply chains.

All eyes now turn to Nvidia’s November 19 earnings report. Any sign of slowing data-center growth, weaker-than-expected guidance, or margin compression could test bullish conviction.

For traders positioning for downside, Direxion’s Daily NVDA Bear 1X Shares (Ticker: NVDD) seeks daily investment results, before fees and expenses, of 100% of the inverse performance in common shares of NVIDIA Corporation (Ticker: NVDA).

Trading the AI Cycle

Nvidia remains the centerpiece of the AI revolution—but that crown comes with pressure. The company has built a near-monopoly on AI infrastructure, yet rising competition and macro noise could mean more volatile trading ahead.

Whether traders believe NVDA will break higher or face a reckoning, Direxion’s NVDU and NVDD ETFs offer tactical ways to play either side of the AI cycle.

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.

Direxion Shares Risks – An investment in a Fund involves risk, including the possible loss of principal. Each Fund is non-diversified and includes risks associated with a Fund concentrating its investments in a particular security, industry, sector, or geographic region which can result in increased volatility. A Fund’s investments in derivatives such as futures contracts and swaps may pose risks in addition to, and greater than, those associated with directly investing in securities or other investments, including imperfect correlations with underlying investments or the Fund’s other portfolio holdings, higher price volatility and lack of availability. As a result, the value of an investment in a Fund may change quickly and without warning.

Leverage Risk – The Bull Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund’s correlation with NVDA and may increase the volatility of the Bull Fund.

Daily Correlation Risk – A number of factors may affect the Bull Fund’s ability to achieve a high degree of correlation with NVDA and therefore achieve its daily leveraged investment objective. The Bull Fund’s exposure to NVDA is impacted by NVDA’s movement. Because of this, it is unlikely that the Bull Fund will be perfectly exposed to NVDA at the end of each day. The possibility of the Bull Fund being materially over- or under-exposed to NVDA increases on days when NVDA is volatile near the close of the trading day.

Daily Inverse Correlation Risk – A number of factors may affect the Bear Fund’s ability to achieve a high degree of inverse correlation with NVDA and therefore achieve its daily inverse investment objective. The Bear Fund’s exposure to NVDA is impacted by NVDA’s movement. Because of this, it is unlikely that the Bear Fund will be perfectly exposed to NVDA at the end of each day. The possibility of the Bear Fund being materially over- or under-exposed to NVDA increases on days when NVDA is volatile near the close of the trading day.

NVIDIA Corporation Investing Risk — NVIDIA Corporation faces risks associated with meeting the evolving needs of its large markets – gaming, data center, professional visualization and automotive – and identifying new products, services and technologies; competition in its current and target markets; changes in customer demand; supply chain issues; manufacturing delays; potential significant mismatches between supply and demand giving rise to product shortages or excessive inventory; the dependence on third-parties and their technology to manufacture, assemble, test, package or design its products which reduces control over product quantity and quality, manufacturing yields, development, enhancement and product delivery schedules; significant product defects; international operations, including adverse economic conditions; impacts from climate change, including water and energy availability; business investment and acquisitions; system security and data protection breaches, including cyberattacks; business disruptions; a limited number of customers; the ability to attract, retain and motivate executives and key employees; the proper function of its business processes and information systems; its intellectual property; and other regulatory and legal issues.

Semiconductor Industry Risk – Semiconductor companies may face intense competition, both domestically and internationally, may have limited product lines, markets, financial resources or personnel and may face risks related to the availability of materials.

Technology Sector Risk — The market prices of technology-related securities tend to exhibit a greater degree of market risk and sharp price fluctuations than other types of securities. These securities may fall in and out of favor with investors rapidly, which may cause sudden selling and dramatically lower market prices.

Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Industry Concentration Risk, Market Risk, Indirect Investment Risk, and Cash Transaction Risk. Additionally, for the Direxion Daily NVDA Bear 1X Shares, Shorting or Inverse Risk. Please see the summary and full prospectuses for a more complete description of these and other risks of a Fund.

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