Nvidia Stock Reacts to News of Huawei Developing Competing AI Chip

Nvidia shares dropped on Monday, breaking a four-day winning streak, following reports that Huawei Technologies, a Chinese company, is working on an AI chip to rival Nvidia’s high-performance products. According to The Wall Street Journal, Huawei’s new chip aims to replace some of Nvidia’s popular offerings, and the company is collaborating with several Chinese tech firms to test its feasibility. Although Nvidia’s stock has surged by 25% from an early-April low, it has still lost about 20% of its value since the beginning of the year, primarily due to competition from cheaper Chinese AI technology and restrictions on the export of Nvidia’s H20 chips to China. Technically, Nvidia’s stock is showing a falling wedge pattern on its chart, which could signal a bullish breakout if it breaks above key price levels. The critical resistance levels to watch are around $115 and $130, while the support levels are $96 and $87. Investors are watching these key levels as they may indicate potential buy or sell opportunities based on Nvidia’s price movement. The relative strength index (RSI) is also showing signs of improved momentum, which may further support positive price action.