- 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 up 0.7% in Friday’s premarket after US Nonfarm Payrolls for August 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.
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 extended to $497 in Friday’s premarket. NASDAQ futures have risen 0.6% at the time of writing.
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 is the leading fabless designer of graphics processing units or GPUs. These sophisticated devices allow computers to better process graphics for display interfaces by accelerating computer memory and RAM. This is especially true in the world of video games, where Nvidia graphics cards became a mainstay of the industry. Additionally, Nvidia is well-known as the creator of its CUDA API that allows developers to create software for a number of industries using its parallel computing platform. Nvidia chips are leading products in the data center, supercomputing and artificial intelligence industries. The company is also viewed as one of the inventors of the system-on-a-chip design.
Current CEO Jensen Huang founded Nvidia with Chris Malachowsky and Curtis Priem in 1993. All three founders were semiconductor engineers, who had previously worked at AMD, Sun Microsystems, IBM and Hewlett-Packard. The team set out to build more proficient GPUs than currently existed in the market and largely succeeded by late 1990s. The company was founded with $40,000 but secured $20 million in funding from Sequoia Capital venture fund early on. Nvidia went public in 1999 under the ticker NVDA. Nvidia became a leading designer of chips to the data center, PC, automotive and mobile markets through its close relationship with Taiwan Semiconductor.
In 2022, Nvidia released its ninth-generation data center GPU called the H100. This GPU is specifically designed with the needs of artificial intelligence applications in mind. For instance, OpenAI’s ChatGPT and GPT-4 large language models (LLMs) rely on the H100’s high efficiency in parallel processing to execute a high number of commands quickly. The chip is said to speed up networks by six times Nvidia’s previous A100 chip and is based on the new Hopper architecture. The H100 chip contains 80 billion transistors. Nvidia’s market cap reached $1 trillion in May 2023 largely on the promise of its H100 chip becoming the “picks and shovels” of the coming AI revolution.
Long-time CEO Jense Huang has a cult following in Silicon Valley and on Wall Street due to his strict loyalty and determination to build Nvidia into one of the world’s leading companies. Nvidia neary fell apart on several occasions, but each time Huang bet everything on a new technology that turned out to be the ticket to the company’s success. Huang is seen as a visionary in Silicon Valley, and his company is at the forefront of most major breakthroughs in computer processing. Huang is known for his enthusiastic keynote addresses at annual Nvidia GTC conferences, as well as his love of black leather jackets and Denny’s, the fast food chain where the company was founded.
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