Nvidia stock gains 2.5% as AI chip demand surges on Meta and Microsoft investments
NVDA remains a foundational player in the AI hardware supply chain
As of May 2, Nvidia stock is trading at $111.61, up 2.5% in the past 24 hours. Nvidia (NASDAQ: NVDA) has displayed a notable technical rebound over recent sessions, recovering over 25% from its April lows.
The current price action signals a potential breakout from a falling wedge pattern, which is typically considered a bullish formation in technical analysis. This recovery has brought the stock back to a key resistance zone around $115, a level that aligns with the upper boundary of the wedge. A breakout above this threshold would likely signal a continuation of the uptrend, possibly unlocking higher price levels.
Short-term support is clearly defined around $96, which represents the mid-April pivot low. Below that, the next significant support level lies at $87, a key base from February's consolidation. On the upside, if NVDA can decisively break above $115, it would open the path toward the $130 region, which coincides with the 200-day moving average. This level also intersects with historical supply zones, making it a formidable resistance point.
NVDA stock price dynamics (March 2025 - May 2025). Source: TradingView.
The Relative Strength Index (RSI) on the daily chart has recently crossed the neutral 50 threshold, now hovering near 58, signaling improving bullish momentum. The MACD indicator is also confirming the upward bias, as the signal line is beginning to diverge positively from the MACD line. Volume patterns have shown steady accumulation, suggesting institutional support behind the current rally.
AI investment surge offsets China-related headwinds
Nvidia’s stock performance is closely tied to developments in the artificial intelligence (AI) and data center segments, where it maintains a dominant position through its high-performance GPUs. The latest boost in sentiment came after major announcements from Meta Platforms and Microsoft. Both tech giants confirmed expanded capital expenditures aimed at building out next-generation AI infrastructure, directly benefiting Nvidia, whose chips remain critical to powering large language models and AI workloads.
This renewed corporate investment into AI has bolstered Nvidia’s long-term demand outlook, reinforcing the narrative that NVDA remains a foundational player in the AI hardware supply chain. Such optimism has helped NVDA recover quickly from April’s declines, which were triggered by a mix of macroeconomic worries and sector rotation.
However, not all developments are bullish. The company disclosed a $5.5 billion charge related to inventory write-downs of its H20 chips intended for the Chinese market. This write-down is a direct consequence of U.S. export restrictions imposed on AI semiconductors, which continue to strain Nvidia’s operations in China—a key market for its data center segment. The geopolitical backdrop remains complex, and any escalation in trade tensions could dampen sentiment despite domestic and Western market strength.
Cautious optimism with breakout scenarios
In the near term, Nvidia’s trajectory depends heavily on its ability to break above the $115 level. A daily close above this resistance, especially on increased volume, could propel the stock toward $130—an area marked by both technical and psychological significance. If NVDA manages to sustain that momentum, the next bullish target would lie around $150, which aligns with the March high before the latest pullback.
On the downside, if Nvidia fails to breach $115 convincingly, a period of consolidation between $96 and $115 is likely. A break below $96 would reintroduce downside pressure, possibly leading to a deeper retracement to the $87 support level.
Macroeconomic concerns, including a 0.3% drop in U.S. Q1 GDP and soft job growth, are fueling fears of a broader economic slowdown. This uncertainty has weighed on high-valuation tech stocks like Nvidia, despite its strong performance over the past year.
