TLDR
- NVIDIA stock jumped 3.5% to $174.19 despite Broadcom’s $10 billion custom AI chip order threatening market share
- Jefferies maintains Buy rating citing AI compute supply shortages and NVIDIA’s dominant data center position
- Citi cuts price target to $200 from $210 due to custom chip competition but keeps Buy rating
- Technical analysis shows strong uptrend with key resistance at $183.90 and support at $165
- Analysts project potential rally to $215 if China H20 chip shipments increase
NVIDIA stock surged 3.5% to $174.19 on September 10, demonstrating resilience against growing competition from custom AI accelerators. The chip giant’s performance reflects investor confidence despite new market challenges.
Jefferies maintained its Buy rating, keeping NVIDIA on its franchise picks list. The firm highlighted ongoing AI compute supply shortages driving demand for NVIDIA’s products.
“The rapid proliferation of AI demand continues with leaders from across the industry offering commentary indicating compute supply shortages,” Jefferies stated. NVIDIA’s dominance in AI data center accelerators supports this bullish view.
Trading volume exceeded 157 million shares, well above the 30-day average, showing increased institutional interest. Mutual funds purchased $4.83 billion in NVIDIA shares over the past quarter, demonstrating long-term confidence.
Technical Analysis Shows Bullish Momentum
NVIDIA maintains a strong uptrend, trading above key moving averages. The stock sits above its 50-day moving average at $165.22, 100-day average at $151.76, and 200-day average at $137.07.
The relative strength index rebounded to 67, indicating renewed momentum without reaching overbought levels. The MACD line remains positive, reinforcing bullish sentiment among technical indicators.
Key resistance lies at $183.90, marking July and September peaks. A breakout above this level could trigger moves toward $190-$195, potentially shifting sentiment for Q4 gains.
Support levels sit at $172 initially, with stronger support at $165. Any close below $165 would signal potential trend reversal, though current momentum makes this scenario unlikely.
Custom Chip Competition Creates New Challenges
Citi analyst Atif Malik lowered NVIDIA’s price target from $210 to $200 while maintaining a Buy rating. Malik cited competitive threats from Broadcom and hyperscalers investing in custom silicon.
Broadcom’s $10 billion custom AI accelerator order represents a strategic challenge to NVIDIA’s market share. These specialized chips optimize AI workloads without relying on NVIDIA’s architecture.
Citi projects custom AI accelerator sales will grow 53% in 2026, outpacing the 34% growth forecast for AI GPUs. This trend could potentially impact NVIDIA’s roughly 90% AI processor market share.
The firm estimates custom chip competition could affect NVIDIA’s 2026 GPU sales by $12 billion. However, analysts remain divided on the competitive impact timeline.
KeyBanc’s John Vinh maintained an Overweight rating with a $230 price target. Vinh emphasized NVIDIA’s CUDA software platform advantage and high customer switching costs.
Price Target Outlook
Base-case scenarios project NVIDIA retesting $180-$185 resistance over the next month. Sustained closes above $185 could open paths toward $195-$200 before Q3 earnings.
Optimistic scenarios see potential rallies toward $210-$215 if H20 chip shipments to China increase and guidance improves. This represents roughly 23% upside from current levels.
NVIDIA’s $60 billion buyback program and strong Q3 guidance continue supporting investor confidence despite competitive headwinds from custom AI chip development.
