Shares of AI chip giant Nvidia (NVDA) rose on Monday, recovering from last week’s declines.
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Nvidia is dominating the AI game. Will this momentum continue?
Nvidia rose 4.1% to close at 109.02 on light trading volume, reaching a test of resistance at its 21-day exponential moving average for the third time since late July. The company’s shares last closed above that level in mid-July.
Shares of the semiconductor giant have fallen recently amid growing concerns about a broader economic slowdown. Nvidia shares also fell sharply last week following news that the launch of the company’s next-generation AI processor would be delayed. The semiconductor company’s shares fell for a fourth straight week on Friday.
Nvidia Stock: A Key Role in AI
But Monday’s stock price gains confirmed Wall Street expectations that AI infrastructure buildout will remain strong and that Nvidia will play a key role in the trend. Piper Sandler analysts Harsh Kumar and Robert Aguano said the potential impact of reported Nvidia chip delays could benefit rival AMD.
“While we believe the NVDA chip delay is unlikely to be true, if it is true it would bode well for AMD in the near term if NVDA is struggling with chip supply or timing,” the companies said in a client note. AMD (AMD) shares surged on the day the report was released. AMD shares were up more than 1.5% as of Monday afternoon.
“Fundamentally, NVDA remains the strongest player in the AI accelerator space, projected to capture 80% share of the merchant market by 2028,” the note said.
Aguano said news of a surge in memory chip exports from South Korea to Taiwan may have boosted Nvidia’s shares on Monday. “This could be seen as a positive given that Nvidia has been raising memory prices and passing those costs on to hyperscalers,” Aguano told Investor’s Business Daily.
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