What’s on the horizon for Nvidia’s stock price? Concerns arise due to RSI divergence and rising competition from Google.
Nvidia’s (NVDA) stock performance is showing signs of a potential bearish trend, highlighted by a Relative Strength Index (RSI) divergence observed in recent weeks. This divergence often foreshadows a shift in price direction and could signal a downward trajectory for NVDA stock, which has experienced a remarkable 145% surge since October 2022.
In addition to internal pressures, Nvidia is now facing stiff competition from Google, whose recent revelation about the superior speed of its custom-designed chips compared to Nvidia’s popular A100 chips caused Nvidia’s stock to decline by 2.1% on Wednesday. This news also impacted competitor Advanced Micro Devices (AMD), which witnessed a 3.5% dip in its stock value.
Google’s fourth-generation Tensor Processing Units (TPUs) are reportedly 20% to 70% faster than Nvidia’s A100 chips, widely utilized in the AI community. Furthermore, Google asserts that these TPUs are nearly twice as energy-efficient, addressing a critical concern in high-performing semiconductor devices.
Qualcomm (QCOM) has also made strides in the AI chip realm, as its AI 100 chips have surpassed Nvidia’s H100 model in tasks like image classification. These advancements could further erode Nvidia’s market position and stock performance.
Moreover, concerns about the US economy have resurfaced, affecting growth stocks like Nvidia. Reports of unexpectedly low jobless claims and a more subdued-than-anticipated nonfarm payrolls report are prompting some investors to divest their holdings, contributing to the uncertainty surrounding Nvidia’s future outlook.
The combination of RSI divergence, heightened competition, and economic anxieties suggests a potential decline for Nvidia’s stock. Investors are advised to stay vigilant regarding these developments and adapt their investment strategies accordingly.
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