Nvidia stock climbs 5.4% as U.S.-China trade optimism lifts tech sector
The U.S.-China agreement has reduced fears of immediate tariff escalations
As of May 13, Nvidia stock is trading at $123, up 5.4% in the last 24 hours. Nvidia has been a focus for investors due to its remarkable recovery from the early April low of $86.62, marking a 35% gain.
Nvidia’s recent rally has seen the stock move above its 21-day and 50-day moving averages, indicating short-term bullish momentum. However, the stock now faces a crucial test at the 200-day moving average, a level that has historically acted as strong resistance. A clear breakout above this point could set the stage for further gains.
The Relative Strength Index (RSI) has climbed above 50, signaling increasing buying momentum. Yet, the Accumulation/Distribution Rating is at D-, suggesting that institutional investors may be selling more than buying. This divergence between price action and volume is a cautionary sign, indicating that the rally could be driven more by retail enthusiasm than institutional support.
NVDA stock price dynamics (March 2025 - May 2025). Source: TradingView
This price action reflects strong investor interest, driven by the company’s dominant position in the AI and semiconductor markets. Trading volume has also shown significant spikes, particularly following positive news about Nvidia’s advancements in AI technology. Sustained volume growth could support a breakout, while declining volume might signal fading momentum.
Trade optimism and growth prospects
The broader market has been lifted by improved US-China trade relations, which have eased some uncertainties affecting tech stocks. Nvidia, with its leading position in AI and gaming sectors, has been a direct beneficiary. Investor interest remains strong, reflecting confidence in the company’s innovation and market leadership. The U.S.-China agreement has reduced fears of immediate tariff escalations, supporting a recovery in semiconductor stocks. Additionally, global demand for AI-powered solutions has remained robust, providing Nvidia with a steady growth runway.
However, Nvidia faces several challenges. Competition from Chinese AI chipmakers is growing, and there are concerns over potential US restrictions on Nvidia’s H20 chips. These factors could impact the company’s revenue growth in critical markets. Moreover, global supply chain disruptions continue to pose risks, potentially affecting Nvidia's production capabilities. Rising regulatory scrutiny in the tech sector also adds another layer of uncertainty.
Another significant event for Nvidia will be its upcoming earnings report, expected around May 28. Investors will closely monitor the company’s performance in key segments, including data centers and gaming. Weakness in these areas could trigger selling pressure. Strong data center performance could mitigate concerns, while robust gaming revenue might reinforce bullish sentiment. Nvidia’s guidance for the next quarter will be crucial in setting investor expectations.
Consolidation with potential breakout
In the near term, Nvidia may encounter resistance around the $130 level, which aligns with the 200-day moving average. If the stock fails to clear this level, it could consolidate in a range between $115 and $130. This range may persist until Nvidia’s earnings report, which could act as a catalyst for a decisive move.
A successful breakout above $130 would open the path to $150, especially if driven by strong earnings and positive guidance. Conversely, a breakdown below $115 could see the stock retesting support at $105.
Nvidia remains a leader in AI and GPU markets but faces rising competition and geopolitical risks. Reports of Huawei advancing its AI chip development add uncertainty to Nvidia’s future growth, especially in China.
