Nvdia Stock Forecast as China Probe on US Chip Companies Intensifies

Nvidia stock price continued its consolidation phase this week as traders waited for more cues about the artificial intelligence industry as the earnings season starts. NVDA was trading at $180, a few points below the year-to-date high of $196 as China continues to focus on US semiconductor companies.

Nvidia Stock Wobbles as China Investigation Into US Chip Companies Continues

The NVDA stock price was on edge after Bloomberg reported that China’s Trade Remedy and Investigation Bureau was intensifying its crackdown on American semiconductor companies.

The report noted that Beijing was asking companies more questions from these companies as part of a probe it launched last month, as the trade tensions with the US escalated. Officials are asking these chip companies details on their customers, sales volumes, logistics and warehouse details, and prices. These firms have 37 days to provide answers.

Nvidia is not part of the chips companies being probed, as the investigation focuses on companies like Analog Devices and Texas Instruments. However, this probe could also apply to it in the future when it restarts doing business in the country.

Nvidia, the biggest company in the world, has become part of the ongoing trade tensions between the US and China. Donald Trump initially asked the company to stop selling the H20 chips to China a few months ago.

He then reached a deal with Nvidia and AMD, allowing them to sell the chips there in exchange for a 10% profit share with the US government. China, on the other hand, was no longer interested in these chips as it sought to boost local industry. It recently asked its companies to stop buying Nvidia chips, as it believes that the locally made ones have potential.

Therefore, analysts hope that the semiconductor industry will be part of the upcoming discussion between Chinese and US officials. Scott Bessent and his Chinese counterpart are meeting this week to prepare for the first summit between Donald Trump and Xi Jinping at the APEC Summit in South Korea.

A deal allowing Nvidia to sell its chips in China would be bullish for the stock as the country is the biggest player in the semiconductor industry.

Earnings Season to Provide Color on the AI Industry

The Nvidia stock price will next react to the upcoming earnings statements by companies in the semiconductor industry and also its customers.

TSMC and ASML have already published strong results, pointing to resilient demand for chips. Intel and IBM will publish this week, and probably provide some details about the sector.

The most important numbers are that the Nvidia stock price will come out next week when companies that account for more than 50% of its revenue publish their numbers. These firms include popular names like Microsoft, Meta Platforms, Amazon, Apple, and Google.

One major news that came out before these earnings is that Google is nearing a multi-billion-dollar deal with Anthropic to provide data center solutions. Such a deal would be a good for Nvidia because it probably means more demand from Google, one of its top clients.

Nvidia Stock Price Technical Analysis

The weekly timeframe chart shows that the NVDA stock price has jumped from a split-adjusted low of $10 in 2022 to an all-time high of $196 this year.

It has remained in a tight range in the past few days as some investors start to book profits.

The stock remains above the important support level at $158, its highest level in January this year. It has also moved above the 50-week and 100-week moving averages.

Nvidia stock price was trading at the weak, stop, and reverse point of the Murrey Math Lines, while the Relative Strength Index (RSI) has moved closer to the overbought level.

These technicals suggest that the Nvidia stock price has more upside, with the initial target being at $200, the ultimate resistance of the Murrey Math Lines.. An extended move above that level will lead to more gains to the extreme overshoot level of $250.