Nvidia Stock Price Holds Key Support as New Demand Catalysts Emerge

Key Insights

• Nvidia stock price held above a major support zone despite recent consolidation.
• Jane Street’s data center plans could create a new source of AI chip demand.
• Nvidia expanded into CPUs as AI infrastructure spending remained strong.

Nvidia stock price traded sideways this week despite several developments that strengthened its long-term outlook. The stock remained above a critical support level as investors weighed rising demand for AI infrastructure, new product launches, and expanding opportunities in data center computing.

The consolidation followed another strong earnings report that highlighted Nvidia’s growing influence across the AI ecosystem.

Jane Street to Build its New Data Centers Amid Scarce Computing Power

For a long time, companies in the trading industry have relied on third-party data centers to power their operations. In Jane Street’s case, it has become one of the top partners for CoreWeave, a company that is building tens of data centers in the United States.

Turns out, the demand for computing power continues to rise, and companies are considering launching their own data centers. According to Bloomberg, Jane Street is now planning to build its own data centers, a move that may open a new avenue for Nvidia to sell its chips.

This move may prompt more companies in the high-frequency trading (HFT) industry to invest in their own data centers. Some of its top competitors are companies like Citadel, Susquehanna, and Virtu Financial.

Computing Demand is Still Rising

The most recent financial results by Nvidia and other technology companies show that demand for computing power continues rising this year. For example, Broadcom reported that its quarterly revenue jumped by 44% in the first quarter, with its AI semiconductor revenue more than doubling.

Similarly, top AI companies like Dell Technologies, Marvell Technology, and HP Enterprise have reported strong numbers.

Most notably, Nvidia’s recent results showed that its business surged in the first quarter. Its revenue rose by 85% in Q1 to $81 billion, higher than its previous guidance of $79 billion. Its guidance was that its revenue will jump to over $91 billion this quarter.

Nvidia Launched New CPUs This Week

The other key catalyst for the Nvidia stock price is that it recently launched new CPUs for the Windows market this week. This is a major development as it is, indirectly, a bet that the AI agent craze will accelerate in the coming years.

The new products will make Nvidia a crucial competitor to companies like AMD and Intel that have a large market share in the CPU market. It will also compete with Qualcomm, a company that has attempted to enter the CPU space for years.

Therefore, there is a likelihood that the company’s future revenues will be much higher than expected because of this CPU business. At present, the average estimate is that its annual revenue will jump 81% this year to $391 billion, followed by $548 billion next year. Chances are that the revenue will hit $400 billion this year.

Another major catalyst is that the company’s business may start growing in China, where it has started selling the H200 chips to some of the top companies in the country.

Despite all this growth trajectory, there are signs that the company is undervalued. It has a forward price-to-earnings ratio of 24, slightly higher than the S&P 500 Index average’s of 22.

Nvidia Stock Price Technical Analysis

The daily chart shows that the NVDA stock price has remained slightly above the key support level at $212 this month. This is an important price as it was the previous all-time high and is also the upper side of the cup-and-handle pattern. C&H is one of the most accurate continuation signs in technical analysis.

The stock has remained above the 100-day Exponential Moving Average (EMA) and the Major S/R pivot point of the Murrey Math Lines tool at $200. Therefore, the stock will likely continue rising as bulls target the all-time high of $235. A move above that level will lead to more gains, potentially to $650 followed by $700.

On the other hand, a drop below that support will invalidate the bullish outlook and point to further downside.

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