Nvidia Stock Forecast: NVDA sinks 1% despite good news from NFP release
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- Nonfarm Payrolls for August provided data showing Fed may not require more hikes.
- NVDA stock has been issuing Doji candles late this week that demonstrate uncertainty among bulls.
- Intel's Gaudi 2 chip is being called a competitor to Nvidia's H100.
- Samsung signs deal to begin supply high bandwidth memory chips to Nvidia.
Nvidia’s (NVDA) stock price edged 1% lower a half hour into Friday's main session despite US Nonfarm Payrolls data that reduced the need for further rate hikes from the Fed. August Nonfarm Payrolls arrived at 187K. That figure was higher than the 170K expected but lower than the 200K that the market did not want. More significantly, July's NFP results were revised down from 187K to 157K, and the Unemployment Rate rose from 3.5% to 3.8%. A higher unemployment rate and overall reduced hiring means that the Federal Reserve has less reason to raise interest rates at its September or November meetings as the labor market has become a bit more relaxed than earlier in the year.
NVDA stock has equivocated over the past two sessions and appears uncertain ahead of Friday’s Nonfarm Payrolls release as well. NVDA added 0.98% on Wednesday and 0.18% on Thursday, but the daily candlesticks show hefty wicks on either end and closes toward the center of the price action. This type of trading hints at bulls exiting their long positions and could mean that Nvidia stock is in for another pullback.
Nvidia stock has dropped to $488 after trending up above $497 earlier in the day. The NASDAQ Composite has drifted 0.2% so far in the session.
Nvidia stock news
Nvidia has closed a deal with Samsung to buy the Korean company’s HBM3 memory chips for use with its artificial intelligence-focused platforms and data centers. Samsung’s stock advanced 6% in the Korean stock market as the report said Samsung would likely supply as much as 30% of Nvidia’s High-Bandwidth Memory needs in 2024.
Until now, Nvidia has relied on SK Hynix for all its HBM3 chips used its A100 and H100 GPUs built for use in generative AI technologies. Another rumor says that executives from Samsung’s foundry division are also in talks with the upper echelon of Nvidia to offer chip packaging services to the leading AI chip maker. Nvidia has been largely using Taiwan Semiconductor (TSM) for all its chip packaging demand, but the latter foundry is fully booked at the moment with hefty demand for AI-related chip manufacturing.
In a first broadside against Nvidia’s lead among AI-focused semiconductors, Intel’s (INTC) Gaudi 2 chip is being touted as a possible competitor. Hugging Face, the machine-learning platform provider, recently tested the Gaudi 2 chip against Nvidia’s H100. While they determined that the H100 still wins on average across a broad range of AI workloads, they wrote in a blog post this week that the Gaudi 2 is as much as 41% faster when fine tuning vision-language models.
This is because the Gaudi 2 utilizes in-chip hardware-based decoders to help the CPU in managing its workload before the computations are sent to the AI accelerator. Hugging Face’s test shows that Nvidia may be leading the pack, but it will not be the only game in town for long.
Nvidia stock forecast
In a similar way to what happened one month ago, Nvidia is a gain seeming to crest higher at quite small intervals. Take a look at the two circles on the daily chart below. These types of candlesticks are typically called Dojis, and they are normally thought to show equivocation.
When three Doji-type candles happened in a row between July 28 and August 1, exactly one month ago, NVDA stock happened to fall from near $467 to $403 over the next two weeks. Though the Relative Strength Index (RSI) is not yet at overbought levels, a similar pullback trade could be in the offing. Take care.
NVDA daily chart
