Nvidia stock rises 3.5% despite rising pressure from Broadcom custom AI chip

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Highlights

- Nvidia remains in a strong technical uptrend, trading above key moving averages with bullish momentum and support near $165.

- Broadcom’s $10 billion custom AI chip order highlights growing competition, with potential to erode Nvidia’s 2026 GPU sales by $12 billion.

- Despite competitive threats, Nvidia’s CUDA ecosystem, strong Q3 guidance, and $60 billion buyback reinforce investor confidence and upside potential.

Technically, NVDA remains in a strong uptrend, trading above its 50-day moving average near $165.22, the 100-day average at $151.76, and the longer-term 200-day at $137.07. This alignment of key averages suggests that the bullish trend remains intact, with buyers stepping in during recent dips. The slope of the moving averages continues to point upward, further reinforcing the underlying strength in the trend.

Relative strength index (RSI) has rebounded to approximately 67, signaling renewed upward momentum but not yet in overbought territory. The MACD line remains positive, reinforcing the bullish stance. Momentum indicators are showing early signs of a potential continuation phase, particularly if RSI breaks above 70 in the coming sessions. A surge in trading volume to over 157 million shares, well above the 30-day average, suggests increased institutional interest during the recent bounce.

Nvidia stock price dynamics (June 2025 - September 2025). Source: TradingView

Key resistance lies at $183.90, which marks the July and early September peak. A breakout above this level would likely trigger a test of the $190–$195 zone. Breaching this threshold could shift sentiment more decisively in favor of a renewed leg higher into Q4. On the downside, initial support sits at $172, followed by a firmer floor at $165. Any close below $165 would signal a potential trend reversal, though this appears unlikely given current momentum and fundamentals.

Custom chip momentum challenges Nvidia’s AI dominance

Investor attention has shifted sharply to custom AI chips following Citi analyst Atif Malik’s decision to lower his Nvidia price target from $210 to $200. While maintaining a Buy rating, Malik flagged growing competitive threats from Broadcom and other hyperscalers that are investing heavily in custom silicon. The premarket gain on September 10 came despite this downgrade, reflecting confidence in Nvidia's near-term momentum, but the long-term implications of this shift are notable.

Broadcom’s recent $10 billion order for custom AI accelerators, or XPUs, represents a strategic challenge to Nvidia’s dominance in AI GPUs. These tailor-made chips, often co-designed with major cloud players, are designed to optimize AI workloads without relying on Nvidia’s architecture. Citi now projects that sales of XPUs will grow 53% in 2026, outpacing the 34% growth forecast for AI GPUs. This trend, if it persists, could chip away at Nvidia’s roughly 90% share in the AI processor market.

Still, not all analysts agree with Citi’s cautious stance. KeyBanc’s John Vinh reiterated an Overweight rating and maintained a $230 price target, citing Nvidia’s entrenched advantage through its CUDA software platform. Vinh emphasized that developer familiarity and the high switching costs tied to the CUDA ecosystem limit the pace at which customers could transition to alternative hardware, such as Google’s TPUs or custom XPUs from Broadcom.

$180 next, $215 possible on China progress

The base-case scenario over the next 4–6 weeks calls for continued consolidation with a bullish tilt. Assuming stable macro conditions and steady Blackwell chip sales, NVDA is likely to retest resistance in the $180–$185 range. A sustained close above $185 would open the path toward $195, and possibly $200 before Q3 earnings. This scenario also assumes no major deterioration in global risk sentiment or regulatory headwinds, which could otherwise stall momentum.

In a more optimistic scenario, if H20 chip shipments to China ramp up materially and guidance is revised higher, Nvidia could rally toward the $210–$215 range. This aligns with the upper end of current analyst targets and would represent a roughly 23% gain from current levels. A positive surprise on margin expansion or forward-looking commentary during earnings could further accelerate the upside move.

Citi cut its Nvidia price target to $200 amid rising China risks and growing competitive pressure, prompting a more cautious market stance. Still, institutional investors remain committed, with mutual funds purchasing $4.83 billion in shares over the past quarter, signaling sustained long-term confidence despite short-term price hesitation.

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