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Nvidia stock recovered to $216 on Oct. 26 as investors assessed the semiconductor company’s growth outlook. The shares gained 2.39%, rebounding from Friday’s closing price of $210.96.
Meanwhile, Nvidia announced a proposed $3 billion investment in Meta Platforms on Oct. 27. The agreement expanded their artificial intelligence (AI) partnership while raising questions about circular financing.
Nvidia is Investing in Meta Platforms Amid Circular Investing Fears
NVDA stock rose even after the company made a $3 billion investment in Meta Platforms because of the success of its Muse AI platform. The investment is a sign that Jensen Huang and the team believes that Meta will continue doing well in the coming years.
This investment, however, has led to concerns about circular investment in the artificial intelligence industry. Circular investment is a situation where a company invests in another firm, which then uses its funds to buy its products.
Nvidia, in this case, has invested in Meta Platforms, which is one of its biggest clients. Meta will, therefore, likely use these funds to buy more Nvidia chips over time.
Nvidia has invested in other clients before. It is one of the biggest shareholders in SpaceX, a company that raised $40 billion in debt to buy its chips this month. It has also invested in top neocloud companies like CoreWeave, IREN, and Nebius, which are its clients. Also, it has large stakes in OpenAI and Anthropic.
Big Tech Companies to Publish Their Earnings
The next important catalyst for Nvidia stock is the upcoming earnings by some of the biggest clients, including Microsoft, Amazon, and Alphabet. Microsoft and Google will release the numbers on Wednesday, while Amazon will publish a day after that.
These earnings are crucial for Nvidia because these companies are among its biggest customers, with Microsoft the largest. Microsoft accounts for about 20% of its total revenue.
The three companies will guide what to expect in terms of capital expenditure. A sign that they plan to boost spending will be bullish for Nvidia, a company that sells the most advanced chips to these companies.
However, the three companies are also its competitors. Google is building its TPU chips, while Microsoft and Amazon are creating Maia and Tranium, respectively.
Top analysts are highly bullish on Nvidia shares. For example, MarketBeat places the target price at $321, up by 48% from where the stock is today. The most optimistic analyst has a target of $321.
Most recently, Needham and Yorkville, which Dan Ives runs, hiked their targets to $300, while BNP Paribas has a target of $345. Cantor Fitzgerald has a target of $350, while Rosenblatt has a target of $390.
Nvidia Stock Price Technical Analysis
The daily chart shows that NVDA stock has rebounded from a low of $164 in March this year to its current level of $216. It has remained above the ascending trendline that links the lowest swings in March, July, and October.
Nvidia shares have also held steady above the 50-day Exponential Moving Average (EMA). It has soared above the Supertrend indicator and the Ultimate Support level of the Murrey Math Lines tool at $200.
Therefore, the stock is likely to see a strong bullish breakout in the near term. If this happens, the next important resistance to watch will be at $225, which coincides with the Major S/R pivot point of the Murrey Math Lines tool. On the other hand, a drop below the key support level of $210 will invalidate the bullish outlook.
This article provides information, not financial advice. Stock investments carry risks, including volatility and potential losses. Readers should conduct independent research before investing.
