Key Insights
- Nvidia stock was in a tight range as the recent rally stalled.
- AMD is set to unveil the second-generation Helios on Thursday.
- It has become one of the biggest Nvidia competitors in the industry.
Nvidia stock has underperformed the market this year despite its revenue and estimates showing strong growth. It has jumped by 11% this year, while the Nasdaq 100 Index has risen by 14%.
One reason for this is the rising competition. It may now escalate after the ongoing actions by Advanced Micro Devices (AMD).
AMD to Launch Next Generation AI Infrastructure Products
AMD, which is led by Jensen Huang’s cousin, has become one of the most formidable Nvidia competitors. It has already gained about 8% market share in the AI inference industry.
According to Reuters, the company is preparing to launch a raft of AI hardware that will rival Nvidia. It will do that later today at an event in San Francisco.
The company will launch products like servers, which are known as Helios. It will also launch its Venice central processing unit for data centers.
AMD has already inked some major partners ahead of the launch. For example, Microsoft, Nvidia’s biggest client, has become the anchor customer of Helios. Other companies that have signed up are Oracle, Meta Platforms, and OpenAI.
In a major announcement on Wednesday, AMD announced that it was investing $5 billion in Anthropic, the creator of Claude. As part of this deal, Anthropic will buy up to 2 gigawatts of AI server capacity, featuring its latest Instinct MI450 chips.
AMD is therefore following a strategy that Nvidia has used well over time. It is investing in companies that will then use these funds to buy its chips. By doing that, the company will see a revenue boost, which will improve its stock performance.
AMD is just one of the companies that are seeking to dethrone Nvidia. Its clients, like Microsoft, Google, Meta Platforms, and Amazon are all working on launching their inference chips.
OpenAI has already showcased its chips, which are being manufactured by Broadcom. Some startups include Cerebras, SambaNova, Etched, and d-Matrics.
At the same time, Nvidia is fighting back against AMD. It is working on more products, including a CPU, which will disrupt AMD’s core business.
Alphabet Earnings Point to More Nvidia Chips Demand
On the positive side, Alphabet, a top company in the technology industry, published strong financial results. Its revenue and earnings-per-share were better than what analysts were expecting.
Most importantly, the company announced that it was boosting its capital expenditures. It now expects to spend about $205 billion this year, higher than the previous estimate of $195 billion
While Google’s TPU is gaining market share, the company is also spending huge sums of money on Nvidia chips.
Looking forward, other big-tech companies will publish their financial statements next week. This includes top firms like Meta Platforms, Amazon, and Microsoft. A sign that they are boosting their spending will be bullish for Nvidia.
Nvidia will also react to the upcoming Intel earnings, which are expected to happen later today. These results will likely show that the company experienced strong demand as the CPU business boomed. Nvidia took a large stake in Intel last year.
Nvidia Stock Price Technical Analysis
NVDA stock has staged a cautious rebound in the past few days. It jumped from a low of $189.68 on June 29 to $212 today. This rebound happened after the Nvidia stock formed a large falling wedge, a highly bullish reversal pattern.
NVDA stock has moved above the upper side of the falling wedge. It has also rebounded above the 50-day Exponential Moving Average (EMA).
It also remains between the first and second support levels of Andrew’s pitchfork tool. Therefore, there is a likelihood that the Nvidia stock will continue rising as bulls target the year-to-date high of $236.
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