TradingKey - NVIDIA begins September trading at approximately $220.78 to match the chart reference for $220.70. The price partially filled the gap from last week. There is another support zone at $214.71 - $215.44 below the current trading price. The overall technical outlook remains constructive. The fundamental analysis also strengthened on August 31 after NVIDIA’s $3.5 billion investment in MediaTek and the expansion of NVLink Fusion in custom AI chips. The first target for bulls will be the price level of $230.49.
Q2 Results Still Show Exceptional AI Demand
NVIDIA came out with fiscal Q2 2027 results, reporting a record $96.22 billion, which is an increase of 106% year on year and an increase of 18% on a sequential basis. The Data Center segment revenue also grew 117%, reaching $89.0 billion for the period. GAAP operating income also grew by 124% to $63.73 billion for the quarter.
GAAP EPS was reported at $2.46 and non-GAAP EPS was reported at $2.22. Non-GAAP and GAAP gross margins remained at 75.0% for the company which means NVIDIA is continuing to enjoy a high degree of demand for its products at elevated pricing. Despite the large size, the company continues to enjoy pricing power.
For the fiscal Q3, management guided revenue at $108 billion, plus or minus 2%, and assumed no Data Center compute revenue from China in the guidance.
Rubin Is Now in Full Production
Full production of Vera Rubin has started as racks are now operational with CoreWeave, Google Cloud, Microsoft Azure, Oracle Cloud Infrastructure, and Nebius. NVIDIA has now pivoted to a more complete solution of selling AI factories over selling individual accelerators.
This latest development increases revenue from deployments across GPUs, CPUs, networking, memory and software. AWS encouraged the market demand by announcing a goal to add 2 million additional NVIDIA GPUs during 2027-2028 to their deployment with an increase in the use of Vera CPUs and more advanced networking.
$3.5 Billion MediaTek Investment Is the Freshest Catalyst
MediaTek and NVIDIA announced they would partner in the development of cloud AI, local AI computing, and Automotive AI on August 31st. MediaTek will deploy NVIDIA's NVLink Fusion Platform, allowing hyperscalers and frontier-model developers a direct, pre-validated path to build XPUs.
NVIDIA made a $3.5 billion investment in convertible bonds issued by MediaTek as part of its $3.9 billion offering. This is strategic as NVIDIA can remain central even when customers elect to deploy proprietary accelerators as opposed to NVIDIA GPUs.
This deal expands the partnership to include AI PCs and Software-defined vehicles, thus expanding NVIDIA's total addressable market beyond hyperscale data centers.
Financing Exposure Is Becoming a Bigger Investor Risk
NVIDIA is taking on a more significant role of the company's balance sheet in the AI ecosystem. Reuters has stated NVIDIA has paused some revenue-sharing financing arrangements with smaller AI cloud providers due to concerns of circular financing with smaller AI cloud providers.
SB Energy filed for a US IPO on September 1st. NVIDIA has committed to a $1.5 billion private placement at the IPO price, and is also tied to a previously disclosed $105 billion guarantee supporting OpenAI's large Ohio data-center project.
While these structures may support demand, they create credit, concentration, and regulatory risks that were not previously as important when NVIDIA's main business was selling chips.
Gross Margins and Memory Costs Need Watching
NVIDIA anticipates a 74% gross margin, plus or minus 50 basis points in Q3, as compared to 75% last quarter, and management and Reuters attribute memory availability and component costs as developing constraints, particularly while the Rubin ramp ramps up.
This does not diminish the demand narrative, but it changes the narrative centered around earnings. Investors will have to pay attention to see if revenue growth continues to lessen the margin normalization.
NVIDIA Technical Analysis: $230.49 Is the Retest Level
NVDA is around $220.78 on September 1st, right at the chart's $220.70. The stock is consolidating after testing $230.49 resistance and partially filling the large bullish gap that occurred last week. The focus is on $220.98 currently. If this zone is held and taken out, momentum would return and zones of interest would be around the $224-$228 area prior to resistance around $230.49.
NVIDIA Stock Price Chart - Source: Tradingview
Taking out $230.49 would expose $236.43 and potentially $242.45 and $248.73. The most important level of support is around $214.71-$215.44. This area is comprised of horizontal, gap, and moving average support. The RSI is at 54 and is in line with its signal line at 55 indicating neutral-to-positive momentum. If $214.71 breaks, there is potential for downside targeting $207.33 and $201.70.
Key Levels
· Current level: $220.78
· Immediate pivot: $220.98
· Support: $214.71-$215.44
· Resistance: $230.49
· Upside targets: $236.43, $242.45, $248.73
· Downside targets: $207.33, $201.70
· RSI: 54
Why is NVIDIA investing in MediaTek?
With their deal addition, NVIDIA can keep AI chips integrated within the NVLink eco-system. The company can leverage other networking, interconnects, and stock scale infrastructure even if some hyperscalers create custom XPUs.
What level would confirm another NVDA breakout?
A move above $230.49 would confirm the break out zone and provide a higher probability for resistant levels at $236.43, $242.45 and $248.73.
Bottom Line
Strong AI demand for NVIDIA products is unmatched. The investment case is becoming more convoluted due to pressure on gross margins and increased exposure to ecosystem financing. NVIDIA's $3.5 billion investment in MediaTek will extend NVIDIA's influence in the custom silicon ecosystem, and the production of Rubin and demand from AWS continue the core growth story. NVDA will remain bullish from $214.71-$215.44, whereas $230.49 will continue to create an obstacle for upward movement.
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