2 New Price Targets for Nvidia on New RTX Spark AI Chip
Nvidia’s RTX Spark AI-focused chip will power computers using Microsoft Windows.
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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.
