TLDR
- NVIDIA stock gained 3.5% to $174.19 despite facing increased competition from Broadcom’s $10 billion custom AI chip order
- Jefferies maintained a Buy rating, keeping NVIDIA on their franchise picks list due to AI compute supply shortages
- Citi lowered price target from $210 to $200 while maintaining Buy rating, citing competitive threats from custom silicon
- Technical indicators show NVIDIA remains in strong uptrend with key support at $165 and resistance at $183.90
- Analysts project potential upside to $215 range if H20 chip shipments to China increase and guidance improves
NVIDIA stock climbed 3.5% to $174.19 on September 10, showing resilience despite mounting competitive pressure from custom AI accelerators. The semiconductor giant continues to face scrutiny from analysts weighing its market dominance against emerging threats.
Jefferies reiterated its Buy rating on NVIDIA, maintaining the stock on its franchise picks list. The firm cited ongoing AI compute supply shortages as a key driver for continued bullish sentiment.
“The rapid proliferation of AI demand continues with leaders from across the industry offering commentary indicating compute supply shortages,” Jefferies noted. NVIDIA’s position as the dominant supplier of AI accelerators within data centers supports their positive outlook.
The stock’s recent performance reflects a recovery from earlier September weakness driven by sector rotation and profit-taking. Trading volume surged to over 157 million shares, well above the 30-day average, suggesting increased institutional interest during the bounce.
Technical analysis shows NVIDIA maintains a strong uptrend. The stock trades above its 50-day moving average near $165.22, the 100-day average at $151.76, and the 200-day at $137.07.
The relative strength index rebounded to approximately 67, indicating renewed upward momentum without reaching overbought territory. The MACD line remains positive, reinforcing the bullish stance among momentum indicators.
Key resistance sits at $183.90, marking the July and early September peak. A breakout above this level would likely trigger a test of the $190-$195 zone, potentially shifting sentiment toward a renewed leg higher into Q4.
Custom Chip Competition Intensifies
Citi analyst Atif Malik lowered his NVIDIA price target from $210 to $200 while maintaining a Buy rating. Malik flagged growing competitive threats from Broadcom and other hyperscalers investing heavily in custom silicon.
Broadcom’s recent $10 billion order for custom AI accelerators represents a strategic challenge to NVIDIA’s dominance. These tailor-made chips, often co-designed with major cloud players, optimize AI workloads without relying on NVIDIA’s architecture.
Citi projects that sales of custom AI accelerators will grow 53% in 2026, outpacing the 34% growth forecast for AI GPUs. This trend could potentially erode NVIDIA’s roughly 90% share in the AI processor market.
The firm estimates that custom chip competition could impact NVIDIA’s 2026 GPU sales by $12 billion. However, not all analysts share this cautious perspective on competitive threats.
KeyBanc’s John Vinh reiterated an Overweight rating with a $230 price target. Vinh emphasized NVIDIA’s entrenched advantage through its CUDA software platform and high switching costs.
Technical Outlook and Price Targets
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, NVIDIA likely will retest resistance in the $180-$185 range.
A sustained close above $185 would open the path toward $195, possibly reaching $200 before Q3 earnings. This scenario assumes no major deterioration in global risk sentiment or regulatory headwinds.
In a more optimistic scenario, material H20 chip shipments to China and revised higher guidance could drive NVIDIA toward the $210-$215 range. This aligns with the upper end of current analyst targets, representing roughly 23% upside from current levels.
On the downside, initial support sits at $172, followed by firmer support at $165. Any close below $165 would signal a potential trend reversal, though this appears unlikely given current momentum.
Institutional investors remain committed despite short-term uncertainty. Mutual funds purchased $4.83 billion in NVIDIA shares over the past quarter, signaling sustained long-term confidence.
NVIDIA’s $60 billion buyback program and strong Q3 guidance continue to reinforce investor confidence despite competitive pressures from custom AI chip development.
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