Elon Musk Drives NVDA Price to a New High

On Tuesday, Nvidia’s stock price hit an all-time high, exceeding $1,130, marking a nearly 7% rise from Monday’s closing price.

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This followed a hectic previous week, where Nvidia released a robust report that boosted its stock by over 8% in a single day.

Since early May, NVDA’s price has risen by about 34%. The latest surge in bullish sentiment was fuelled by news that Elon Musk’s company, xAI, is acquiring Nvidia AI chips for a new powerful supercomputer.

According to Investor’s Business Daily, during an investor presentation, Musk revealed that:

→ xAI will need up to 100,000 specialised semiconductors to train and launch the next version of its AI chatbot, Grok.

→ The supercomputer will use Nvidia H100 graphics processors.

→ Musk aims to have the supercomputer, termed a “gigafactory of computation,” operational by autumn 2025.

Reviewing NVDA’s stock price action last week, we:

→ Updated the ascending channel;

→ Predicted that on a bullish momentum, NVDA’s price might approach the median line of the ascending channel.

FXOpen graph 29.05

Today’s technical analysis of the 4-hour NVDA stock chart indicates that:

→ The price is near the median line (which may act as resistance);

→ The RSI is at its highest level in a year.

Given these factors, it is plausible that the market is significantly overbought and susceptible to a pullback. The upcoming 1:10 stock split on 10 June could also impact the situation. While making Nvidia shares more accessible to a broader range of investors (a bullish indicator), there is a possibility that the “buy the rumour, sell the news” phenomenon might occur, leading to a price correction towards the lower boundary of the 2024 ascending channel and potentially testing the gap area (highlighted in purple).

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