Nvidia Stock Analysis: Demand for AI Chips Fuel Bullish Momentum

Oct 3

Nvidia’s meteoric rise in 2024 has been nothing short of remarkable, fueled by the surging demand for its AI chips. Nvidia CEO Jensen Huang described this demand as "insane" during an interview with CNBC, sparking even more excitement around the chipmaker’s stock. As of Thursday's premarket trading, Nvidia shares are up 1.91%, and all eyes are on the company’s continued growth potential.

Insane Demand and Strategic Partnerships
Nvidia (NASDAQ: NVDA) has emerged as a global leader in AI infrastructure, with its next-generation Blackwell AI chips driving much of the growth. Huang's comments highlight the unprecedented demand for these AI chips as companies across various industries race to build out their AI capabilities. Nvidia’s strategic partnership with IT consulting firm Accenture is another critical factor driving growth. The collaboration aims to help businesses implement AI-powered solutions using Nvidia’s cutting-edge technology, further extending Nvidia’s reach into the enterprise AI market.

This partnership underscores Nvidia’s ability to build an ecosystem of AI-driven businesses, drawing comparisons to tech giants like Microsoft and Oracle. By expanding its AI infrastructure, Nvidia is ensuring its long-term dominance in the AI space, and investors are responding in kind. Nvidia’s stock has surged 140% year-to-date, far outpacing expectations.

Strong Financial Performance
Nvidia’s financials remain impressive. The company has consistently outperformed Wall Street’s projections, driving a rally in its stock price and contributing significantly to the broader market rally in the S&P 500. The expanded partnership with Accenture further solidifies Nvidia’s position as a dominant force in the AI landscape. Additionally, demand for AI chips from companies and governments alike continues to rise, making Nvidia the go-to choice for building AI infrastructure.

Nvidia’s massive year-to-date gains have been driven by demand across various sectors for AI solutions, cementing its place at the center of the AI revolution. This success is only expected to continue as Nvidia rolls out more advanced chips and expands its partnerships.

Technical Outlook
From a technical perspective, Nvidia’s stock is showing signs of even further upside potential. After peaking in June, NVDA has been consolidating within a symmetrical triangle pattern—a classic chart formation that suggests a period of consolidation followed by a significant move in the direction of the prevailing trend.

This pattern is a bullish signal, especially given Nvidia’s already strong uptrend in 2024. If Nvidia’s stock breaks above the triangle's resistance level, the technicals point to further upside. Key price targets to watch are $128 and $139


### **Support Levels: Key Breakdown Area to Watch**
Despite Nvidia’s strong bullish momentum, it’s important to consider potential downside risks, particularly in light of the stock’s history of price fluctuations. The key support levels to watch are $110 and $97, which aligns with a trendline linking the March peaks and the 200-day moving average. This area could provide a safety net if Nvidia (NASDAQ: NVDA) faces short-term selling pressure.

Conclusion
Nvidia paints a compelling picture for long-term investors. The ongoing surge in demand for AI chips, coupled with Nvidia’s strategic expansion into enterprise AI through partnerships like the one with Accenture, sets the stage for continued success.

With Nvidia’s stock forming a bullish symmetrical triangle pattern and key price targets pointing to significant upside, now may be the time for investors to ride the wave of this AI-powered growth story. However, investors should also be mindful of potential support areas in the event of short-term volatility. All in all, Nvidia (NASDAQ: NVDA) is primed for continued dominance in the AI chip market, and the stock's technicals suggest there's more room to run.