AI Chip Powerhouse Leads H1 Rally

Nvidia (NVDA programMicrosoft shares rose on Monday, as the artificial intelligence chipmaker recovered from last week’s decline.

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NVIDIA Dominates the AI ​​Game, Can It Keep Up?

Nvidia shares rose 4.1% to close at $109.02 in light volume, rising to a third test of resistance at its 21-day exponential moving average since late July. The stock last closed above that level in mid-July.

Shares of the semiconductor giant have been battered recently amid growing concerns about a broad economic slowdown. Nvidia shares also fell last week after news that the company’s next-generation artificial intelligence processor would be delayed. The chipmaker’s shares posted their fourth straight weekly decline on Friday.

NVIDIA Stock: A Critical Role in AI

But Monday’s rally underscored Wall Street’s expectations that AI infrastructure will remain strong and that Nvidia will play a crucial role in that trend. Piper Sandler analysts Harsh Kumar and Robert Aguano said the potential impact of Nvidia’s chip delays could benefit rival AMD.

“We believe there is not much truth to the NVDA chip delay, but if true, this would bode well for AMD in the near term if NVDA is experiencing supply and/or chip timing difficulties,” the clients said in a note. AMD (AMDAMD shares rose the day the report was released. AMD shares were up more than 1.5% Monday afternoon.

“Fundamentally, NVDA remains the strongest player in the AI ​​accelerators space with an estimated 80% share of the merchant market by 2028,” the note said.

Nvidia may have gotten a boost on Monday from news of increased memory chip exports from South Korea to Taiwan, Aguano said. “This will be seen as a positive as Nvidia is raising memory prices and passing that cost on to the big device manufacturers,” Aguano told Investors Business Daily.

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