Key Points
- Nvidia became the first company to reach a $5 trillion market capitalization after a surge in its stock price.
- The stock gained after CEO Jensen Huang announced new AI products and partnerships with Nokia, Oracle, and Palantir.
- Nvidia’s market cap now significantly exceeds that of Microsoft and Apple, driven by strong demand for AI chips.
- Crucial support levels to watch are $185 and $165, which could attract buyers if the stock pulls back.
Nvidia made history on Wednesday, becoming the first company ever to reach a $5 trillion market capitalization as its stock jumped early in the day. Shares were recently up 4.5% at $210, building on a 5% gain from Tuesday. This surge followed CEO Jensen Huang’s keynote address at Nvidia’s developers conference in Washington, D.C., where he showcased the company’s newest AI products and announced several big deals.
The chipmaker revealed a $1 billion investment in Nokia and a new partnership with the Finnish tech firm to boost its AI infrastructure efforts. Nvidia also announced plans to work with Oracle to build AI supercomputers for the U.S. Department of Energy. Additionally, it will team up with Palantir Technologies to develop an integrated AI technology stack.
Nvidia’s shares have climbed more than 50% since the start of the year. Investors are pouring into the stock, driven by strong demand for AI chips and excitement about the company’s continued growth. Nvidia’s $5 trillion market cap is significantly higher than Microsoft’s and Apple’s, which are around $4 trillion each.
Nvidia shares broke out of a “rising wedge” pattern on Tuesday, with the highest trading volume since late May. This shows strong buying interest. While chart watchers often see this pattern as a sign of trouble, it can also signal that a strong upward trend will continue, especially when it occurs during an already strong rally, as with Nvidia.
At the same time, Tuesday’s breakout pushed the “relative strength index” (RSI) close to “overbought” levels. However, the indicator is still below its July peak, suggesting the stock may have more room to reach new price highs.
We can use technical analysis to guess where Nvidia’s price might go next and identify two important support levels to watch.
The first support level to watch is around $185. This area could attract buyers, as it aligns with prior price movements dating back to when the rising wedge pattern began in early August.
If the stock pulls back further, Nvidia shares could test a lower support level at $165. Investors might look for opportunities to buy at this point, near a trendline connecting last month’s low to the end of a brief dip in late July.
