Nvidia share price has failed to spark despite last week’s Fed interest rate decision-making. It closed trading at $116 on Friday and was down by 0.2 percent and trading at $115.68 at 12.35 EST on Monday. The AI microchip giant has had a torrid run since late-August, but investors are counting on its Blackwell GPU deliveries for a strong show in the last quarter of the year.
Blackwell is Nvidia’s next-generation AI chip class, hailed as a massive upgrade from the highly-successful Hopper class GPUs. Its deliveries began this month, and the impact will be reflected in the next quarterly numbers. A sour macroeconomic environment underpinned by recession fears and a high-interest rate regime have cooled down Nvidia share price’s hot streak seen in the first half of the year.
Nonetheless, Nvidia (NASDAQ: NVDA) remains among the best-performing stocks of 2024, with its year-to-date gains at 135%. Furthermore, it has a strong baseline that almost certainly assures investors of another profitable quarter in the making.
Last week, Nvida CEO Jensen Huang joined executives from tech giants like Google, Microdoft and OpenAI in a meeting at the White House believed to have centred around AI infrastructure spending. Although details of the meeting were not shared, it served as a reminder that AI is the next frontier in technology, and governments are largely invested in it.
Demand for AI data centers is expected to rise substantially in the near term and long term, as cloud services providers like Amazon, Microsoft, and Oracle strive to lead the transition to AI-centric world. Also, software needs from the likes of Tesla and Salesforce is on the rise as they rise to train their Large Language Models.
The factors above provide near fool-proof support to a bullish view on Nvidia share price. The downside, however, could come from the wider macroeconomic ecosystem, where an element of Fear, Uncertainty and Doubt (FUD) still lingers.
Nvidia share price will likely remain subdued if resistance persists at 116.40. With the sellers in control, the first support could come at 115.40. However, a sustained push by the sellers could break below that level to test 114.55.
Conversely, moving above 116.40 will signal the onset of bullish control, with initial resistance likely to be at 117.20. However, that barrier could be broken if the buyers extend their control. In that case, the first resistance could come at 117.20. Furthermore, extended control could enable a break above that level, invalidating the downside narrative to test 118.00.
This post was last modified on Sep 23, 2024, 18:00 BST 18:00