Key Insights
- Nvidia stock has dropped sharply as the AI bubble fears have escalated.
- Intel will publish its earnings report later this week.
- Big-tech earnings like Microsoft and Amazon will publish their numbers.
Nvidia stock has dropped sharply and moved into a correction this month. After soaring to a record high of $243 earlier this month, it has slumped by 13% to the current $210. This weakness will be put to the test as the company reacts to major events this week.
Nvidia Stock to React to Intel Earnings Report
One of the key catalysts for Nvidia shares is the upcoming Intel earnings, which will come out on October 29. These earnings come as Intel shares remain in a bear market, having fallen 40% from their year-to-date high.
Intel’s performance is important for Nvidia because it is a big investor. It took a large stake in the company last year, rescuing the company as its collapse seemed certain. Nvidia now holds 214 million Intel shares valued at over $18.7 billion, making it the fourth-biggest holder after BlackRock, Vanguard, and State Street.
Therefore, Nvidia stock will likely do well if Intel’s earnings are strong, pushing its performance higher. A strong quarterly performance will also be a sign that the AI industry is seeing strong demand from customers. This is important because Nvidia is usually one of the last big tech companies to release earnings.
SpaceX Has Raised $40 Billion to Buy Nvidia Chips
The other important catalyst for Nvidia shares this week is from Elon Musk’s SpaceX, which has confirmed that it raised $40 billion through debt financing. In his statement, the company said that it was still an investment grade.
SpaceX has hinted that most of these funds will go towards acquiring Nvidia GPUs as its AI business continues doing well. The most recent results showed that AI has overtaken Starlink to become its biggest business. It made $7.56 billion, much higher than the $5.2 billion that its Starlink business made.
Therefore, there is a likelihood that Nvidia stock will react to SpaceX’s new development. It is also worth noting that Nvidia is one of SpaceX’s largest shareholders.
Biggest Customers are Publishing Their Earnings
Nvidia stock will also react to the upcoming earnings of some of its biggest clients. Alphabet and Microsoft will report results on Wednesday, while Amazon will report results on Thursday. These earnings come a week after Meta Platforms, another top customer, released its numbers.
This week’s earnings are important because they are the biggest buyers of Nvidia chips. It is usually estimated that Microsoft accounts for about 20% of Nvidia’s total revenue.
At the same time, these companies are also evolving to become Nvidia’s biggest competitors. For example, some analysts believe that Google’s TPU chips will generate over $40 billion in revenue next year. Amazon’s Tranium and Microsoft’s Maia chips are also seeing strong performance.
Nvidia Stock Price Technical Analysis
The daily chart shows that the NVDA stock price has come under pressure in the past few weeks. It fell from a high of $243 earlier this month to the current $210. The current level coincides with the ascending trendline linking the lowest levels since March this year.
The stock has also bottomed out slightly above the 200-day Exponential Moving Average (EMA) and the Strong Pivot Reverse level of the Murrey Math Lines tool.
Therefore, there is a likelihood that Nvidia stock will bounce back in the near term as investors buy the dip. If this happens, the stock will likely rebound to the Major S/R pivot point of $225. A move below the ascending trendline will invalidate the bullish outlook,
This article provides information, not financial advice. Stock investments carry market risks and potential losses. Readers should conduct independent research before investing.
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