Is Nvidia Stock at Risk as Meta Reaches a Major Deal With Google?

Key Insights

• Nvidia stock retreated after publishing its financial results.
• Meta Platforms has announced a big deal with Google.
• It also announced a major deal with AMD.

Nvidia stock price retreated by over 5% on Thursday, even after the company published strong financial results and boosted its forward guidance. It retreated to $184, much lower than the year-to-date high of $195. This retreat may continue in the near term, following Meta Platforms’ major deal with Google.

Meta Platforms Reaches a Deal With Google

There are concerns that competition in the semiconductor industry is rising following recent deals between Meta Platforms and companies such as AMD and Google.

A report by The Information showed that Meta Platforms reached a multi-billion deal with Google. This deal will see Meta rent some of Google’s chips to develop new AI models.

The announcement came a day after Meta Platforms announced a major deal with AMD, which also makes chips similar to Nvidia’s Blackwell. According to the Wall Street Journal, the deal is worth over $100 billion. It also gave Meta Platforms a right to buy AMD shares worth 10%.

The new developments are notable, as Meta Platforms is one of Nvidia’s biggest clients, buying chips worth billions of dollars a year. As such, this could hurt its future revenue growth.

Most importantly, this is happening at a time when the biggest clients like Microsoft and Amazon are building their ASIC chips, a move that will lead to more competition for Nvidia.

Still, Nvidia’s main advantage is its first-mover status, giving its chips an edge in the foreseeable future.

Nvidia Published Strong Financial Results and Guidance

Nvidia’s market share has continued growing in the AI chip industry despite the rising competition from AMD. Its most recent results showed that, despite its size, it is one of the fastest-growing companies in the United States.

Its revenue jumped by 73% in the fourth quarter to $73 billion, even though it officially did not sell its chips in China. The revenue figure was much higher than the third-quarter figure. Most notably, its quarterly revenue was higher than what it made in financial year 2024.

The company anticipates its growth will accelerate as most tech companies increase capital expenditures. It expects to make $78 billion this quarter. Historically, the company’s real revenue has been higher than its guidance by over $1 billion.

Revenue growth will be much better, as Nvidia’s guidance did not include any sales from China. There is increasing hopes that the company will receive these orders later this year.

Nvidia’s profits have also been strong, and management expects the trend to continue. Its annual net income soared to $116 billion last year from $74 billion in the previous financial year.

Another catalyst for Nvidia’s stock is the company’s expansion into other areas. For example, the company plans to launch new CPUs this year as it seeks to grow its business.

Nvidia Stock Price Prediction: Technical Analysis

The weekly timeframe chart shows that the NVDA stock price rebounded from its 2021 low of $86.58 in April to a record high of $212.

The stock has remained in a tight range since November last year. It remained inside the key resistance and support levels at $197 and $170. A closer look shows that it has remained above the 50-week and 100-week Exponential Moving Averages (EMA).

The stock has remained above the Supertrend indicator, a sign that bulls remain in control. It is also slightly below the Ultimate Resistance level of the Murrey Math Lines indicator.

Therefore, there is a likelihood that the NVDA stock price will rebound in the near term.

A move above this week’s high will point to more gains, potentially to $250 as Goldman Sachs analysts predict. On the other hand, a drop below the strong pivot and reverse level at $175 will invalidate the bullish outlook.

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