Nvidia Stock Rises After Deal With Bristol Myers Squibb

Key Insights

• Nvidia stock rose after Bristol Myers Squibb became a key client.
• The company is buying Nvidia’s DGX SuperPOD.
• The next few weeks will be crucial as key companies publish their earnings.

Nvidia stock rose and moved above the important resistance level of $200 on Monday as investors resumed buying semiconductor shares. It also rose after striking a major deal with Bristol Myers Squibb, one of the biggest pharmaceutical companies in the world.

In a statement on Monday, Bristol Myers Squibb said that it will buy the latest generation of DGX SuperPOD that is based on the new Vera system. It has now become the first large pharmaceutical company to buy the system.

BMY hopes that the product will help its support its use of AI across its drug discovery and development operations. Notably, the purchase comes a few years after the company bought the previous generation.

The company will use the advanced system to boost the speed of development. In a note to Reuters, the company said that if it now uses AI to do ten projects, the purchase will help it do dozens within a certain period.

Pharmaceutical and biotech companies have embraced artificial intelligence systems in the past few years. They aim to use these technologies to speed the lifecycle and even cut costs over time.

The new deal may open more opportunities for Nvidia as it may push more companies in the pharmaceutical industry to embrace the platform.

The upcoming weeks will be crucial for Nvidia as many big-tech companies will publish their earnings report. Google and Tesla will be the first big companies to publish their numbers this week. These two companies spend billions of dollars a year buying Nvidia chips. In a recent note, Tesla said that it planned to spend $10 billion on its chips.

After that, other large clients like Microsoft, Meta Platforms, and Amazon will also publish their numbers. These results are coming at a time when their stocks have lagged behind the broader market as investors question their large capital spending.

Therefore, their statements will be of great importance to Nvidia. For example, if one or more companies announce that they are reassessing their spending priorities, chances are that the announcement will impact Nvidia. On the other hand, if they boost their spending, Nvidia stock may benefit.

These announcements are important because of Nvidia’s business model. While the company makes billions of dollars a quarter, it generates most of it from a handful of companies. The top five hyperscalers account for about 46% of its revenue.

On the positive side, Nvidia is working on solving this problem by launching new products. It has recently launched a new CPU, which will help the company attract more clients as the AI agent industry booms. In a recent note, Bank of America analysts estimated that CPU will be a $20 billion-a-year business. Nvidia’s Jensen Huang has argued that it is a $200 billion business.

In addition to the hyperscalers, other companies in the tech industry will release their numbers. This includes companies like Intel and AMD, which are in the semiconductor industry.

The daily chart shows that NVDA’s stock price has jumped over the past few days. It has remained above the ascending trendline that links the lowest levels since March 30th. The stock has also remained stable above the 200-day moving average and last week’s low of $197.

The Average True Range (ATR) has jumped to 7.48, a sign that the volatility is rising. Therefore, the most likely scenario is that the stock remains highly volatile in the coming weeks as earnings stream in. In the long term, however, the stock will likely bounce back and possibly reach a new all-time high.

This article is for informational purposes only and does not constitute investment advice. Stock-market analysis and price levels reflect current market conditions and do not guarantee future performance.

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