2 New Price Targets for Nvidia on New RTX Spark AI Chip
Nvidia ($NVDA) has managed to outdo itself once again. The shares roared higher by 6.2% on Monday as the AI chipmaker announced what it calls “the most efficient PC chip ever built.”
Nvidia is known for a variety of products, including graphics cards and highly advanced computer chips. Nvidia’s new RTX Spark chip is specifically designed for use with Microsoft Windows, with a special focus on AI.
The RTX Spark processor is expected to become available by this fall. ASUS, Dell ($DELL), HP ($HPQ), and Lenovo are among the brands expected to incorporate the new product.
Nvidia Chart Points Higher
Nvidia broke out of a six-month consolidation (shaded yellow) in April and has formed a series of higher highs and higher lows since then. This chart is interesting because it has formed two separate A-B-C-D patterns, which are basically superimposed on each other.
Formation 1 (all black letters) creates a short-term price target of $250 for Nvidia. Formation 2 suggests an intermediate term price target of $285.
Since Nvidia is the largest stock by market capitalization on the U.S. markets, currently at $5.4 trillion, these bullish formations bode well for the major indexes.
Microsoft Showing Signs of Life
The association with the Nvidia name is good news for Microsoft ($MSFT), which has had a volatile ride over the past year.
Shares of the Redmond, Washington-based software giant touched $555 last summer, before falling as low as $356 in March of this year.
Microsoft managed a gain of just over 2% on Monday’s news, but the stock has been performing well lately. Since its March low, Microsoft shares have gained nearly 30%.
Microsoft also managed to close above its 200-day moving average (red) for the first time since January 7 (circled).
Competition With Qualcomm
One company that didn’t take the RTX Spark news well was Qualcomm ($QCOM). Qualcomm manufactures a line of chips known as Snapdragon X, used in Windows laptops and desktop computers. Shares of Qualcomm dropped by 8.7% on Monday’s news.
Despite this setback, Qualcomm shares are still trending higher, reaching an all-time high just last week. Qualcomm’s rising 50-day moving average (blue) recently crossed above its rising 200-day moving average (red), generating a bullish signal known as a golden cross (shaded yellow).
Bottom Line
Nvidia has broken out and formed two versions of the same bullish pattern. This is good news for both short-term and intermediate-term holders of the stock, which should pull the major indexes higher.
Microsoft shareholders will also see a halo effect from its association with Nvidia.
