In a recent post on social media platform X (formerly Twitter), Michael Kramer, founder of Mott Capital Management, suggested that investors holding out for a more attractive entry point may soon find an opportunity in high-flying tech company Nvidia Corp (NVDA). Kramer predicted a potential 30% downside for the stock based on technical analysis, pointing to a possible retreat to pre-gap opening levels following the company's first-quarter earnings report in May.

Nvidia's stock has experienced a remarkable year-to-date gain of about 164%, outperforming the broader S&P 500 Index. The company, known for its artificial intelligence technology-leveraged products, along with its peers in the tech sector, has been a major driver of market upside during the current bull run.

Despite already trading close to record highs, the fear of missing out (FOMO) sentiment continues to attract traders toward Nvidia, despite its relatively expensive valuation. However, Kramer's analysis suggests that a significant pullback could be on the horizon, with the stock potentially dropping 27.40% from its current levels. This would push Nvidia into what is considered "deep correction territory."

Should the projected decline materialize, it could spell trouble for the overall market, as Nvidia and other AI technology-leveraged companies have been major contributors to the bull run. Nvidia briefly held the position of the most valued global corporation, driven by the AI frenzy, before a 3% drop on Thursday pushed it back to the second spot behind Microsoft.

While Nvidia is considered a fundamentally sound company with exposure to a technology expected to dominate in the coming years, questions arise about its ability to sustain its rapid growth and justify its high valuation. Increasing competition in the AI accelerator market threatens Nvidia's near monopoly position, although its unique selling proposition as a fully integrated AI company and first-mover advantage could provide some advantages.

In premarket trading on Friday, Nvidia shares were down 2.02%, following a 3.54% decrease on Thursday, closing at $130.78. Year-to-date, the stock's gains stand at an impressive 171.50%, outperforming the more modest 15.40% increase of the S&P 500 Index.

Investors and analysts will now closely watch Nvidia's performance as the company prepares to release its earnings report in late August. The anticipated pullback could present an opportunity for those seeking entry into the stock at more attractive levels, but the future growth trajectory and competitive landscape will continue to be key factors in evaluating Nvidia's long-term prospects.