Nvidia share price rose to its highest level since its share split in June on Monday, driven by a positive outlook for the AI industry. The stock traded at $142.65 at the time of writing, having gained 2.6 percent within the first two hours of trading. Nvidia (NASDAQ: NVDA) has gained 20 percent in the last month, building a strong bullish undercurrent.
The company’s fortunes have spiked in the aftermath of a supercharged demand for its GPUs by leading tech companies like Meta, Google, Amazon and Microsoft. The orderbook for its Blackwell GPUs is filled for the next twelve months, signaling a near-certain continuation of its strong revenue growth.
Nvidia’s outlook is also supported by Taiwan Semi Conductor Manufacturing Company’s historic quarterly results released last week and its strong guidance for 2025. The company is Nvidia’s supplier and the world’s largest contracted semiconductor manufacturer. Its strong sales project well for the AI industry’s performance.
However, emerging trade wars between China and the United States, as well as the latter’s planned restrictions of sale of high-tech GPUs to certain countries, could limit profit margins. Weighed against the perceived overvaluation of Nvidia, this could eat into its performance in the coming months.
The momentum on Nvidia share price favours continued control by the buyers if the action stays above 140.00. That will likely meet the first resistance at 141.90, but a stronger momentum could break above that level to test the second resistance at 143.20.
Conversely, a move below 140.00 will favour the sellers to take control, with the first support likely to be at 138.90. However, an extended bearish momentum could break below that mark to invalidate the upside narrative. Meanwhile, the resulting momentum could extend the downside to the second support at 137.15.
This post was last modified on Oct 21, 2024, 16:14 BST 16:14