Credit: Unsplash
What’s next for Nvidia’s stock price? RSI divergence and competition from Google raises concerns
Nvidia’s (NVDA) stock chart shows signs of a bearish trend as a Relative Strength Index (RSI) divergence is seen in the last week of trading. This typically precedes a reversal in price action and, in this case, may indicate a downtrend for NVDA stock, which has seen a 145% rally since October 2022.
Adding to the pressure on Nvidia is the competition from Google, which recently announced that its custom-designed chips are faster than Nvidia’s popular A100 chips. This news caused Nvidia stock to fall 2.1% on Wednesday, while competitor Advanced Micro Devices (AMD) also lost 3.5%.
Google’s fourth-generation Tensor Processing Units (TPUs) are said to be between 20% and 70% faster than Nvidia’s A100 chips, which are widely used in the AI community. Google also claims that these TPUs are nearly twice as efficient in energy use, a critical issue among top-performing semiconductors.
Look at the fundamentals of the $NVDA stock. Nothing can justify and back up this kind of price increase. It's a $180-200 stock.
I scaled out 90% of my shares and even opened long-term puts.
And here is my short-term puts😉
Great profits so far! pic.twitter.com/1aofizSMA7— Harrison | Trader & Investor (@harrisonfromnyc) April 5, 2023
Qualcomm (QCOM) has also reported that its AI 100 chips outperformed Nvidia’s H100 model in tasks such as image classification. These developments could further impact Nvidia’s market share and stock performance.
The renewed worry over the US economy also impacts growth stocks, including Nvidia. The unexpectedly low jobless claims report and the nonfarm payrolls report published on Friday, which was expected to be light, are causing some investors to exit their positions.
The RSI divergence in NVDA’s stock chart and increased competition and concerns over the US economy suggests a potential downtrend for Nvidia stock. Investors should closely monitor these developments and adjust their strategies accordingly.
