To The Moon

$NVIDIA Corp(NVDA)$ shares bounced around between gains and losses today, closing 0.53% higher, after Nvidia on late Wednesday (20 Nove) reported revenue and profit that blew past analysts' expectations, as well as a rosy outlook for growth.

Nvidia did gain as much as 5% early in the session, hitting a record high, before falling as much as 3.5%. But on Thursday trading session we saw some of Nvidia partners shares making gains.

Partners Look Forward To Benefit From Nvidia Rosy Outlook For Growth

Super Micro Computer (SMCI)

We saw some of Nvidia (NVDA) partners shares surged on Thursday (21 Nov), $SUPER MICRO COMPUTER INC(SMCI)$ was rising Thursday after Nvidia mentioned SMCI as a client. 

We have seen SMCI shares trading in a volatile mode because of problems with its accounting and those issues are not resolved yet. But SMCI shares surged 15.12% on expectations they could stand to benefit after the chipmaker reported fiscal third-quarter results that blew past analysts’ expectations. 

This is reasonable because SMCI which makes servers that utilize Nvidia chips, will stand to benefit if Nvidia Blackwell chips sales perform well. But can this trend continue for SMCI?

From the technical, SMCI still trade below both short-term and long-term MA, even though it has gathered investors support because of Nvidia earnings, but I would think they are not out of the woods yet. I would wait for it to show a better signal before we look at SMCI.

Not forgetting SMCI is just temporarily out of delisting due to its financial woes.

Dell Technologies (DELL)

Another fellow original equipment manufacturer (OEM) partners Dell gained close to 3.7%, Dell Technologies provides a diverse selection of acceleration-optimized servers with an extensive portfolio of accelerators featuring NVIDIA GPUs. NVIDIA GPUs support various options to connect two or more GPUs, offering various bandwidths. GPU connectivity is often required for certain multi-GPU applications, especially when higher performance and lower latency are crucial. LLMs often do not fit in the memory of a single GPU and are typically deployed spanning multiple GPUs. Therefore, these GPUs require high-speed connectivity between them.

NVIDIA NVLink is a high-speed interconnect technology developed by NVIDIA for connecting multiple NVIDIA GPUs to work in parallel. It allows for direct communication between the GPUs with high bandwidth and low latency, enabling them to share data and work collaboratively on compute-intensive tasks.

So how well will these servers sell might be something we can look at? Not forgetting that these are considered the higher end servers normally purchased by enterprises.

Dell have been trading pretty decent before Nvidia earnings, so the benefit expectations from Nvidia growth might be a plus for Dell, it is forming a nice bullish MACD crossover, so Dell might be a good potential stock to look at.

MTF is giving confidence with a strong upward trend, I will be monitoring to take a position on this stock if price action give me confidence on 22 Nov (Friday).

Micron (MU)

In Feb 2024, $Micron Technology(MU)$ shares surges as it starts mass producing memory chip for Nvidia AI GPUs. Shares of Micron (MU), which provides Nvidia with memory solutions for its AI chips, added more than 4% on Thursday (21 Nov).

So what does this tell us? Demand for Nvidia GPUs is still growing and there should be more demand as AI workloads “are heavily reliant on memory bandwidth and capacity, and Micron is very well-positioned to support the significant AI growth ahead.

This would mean that Nvidia sales from its GPUs would still be in good growth. Micron technical is in a wait-and-see mode, as it is trading near both short-term and long-term MA converging, so MACD is trying for a bullish MACD crossover, MTF is also showing a neutral signal.

So we need to watch more price action on both Nvidia and MU before we assess if we want to take a position on MU.

Summary

There are other partners with Nvidia especially those on the AI side, but these partners shares are not surging, the three partners that I discussed here have a common factor, they are related to hardware.

So we might need to dig deeper, is Nvidia plan moving into both hardware and software being hindered by some challenges? We might see some movements next week from names like META, GOOGL and MSFT, which are buying from Nvidia.

Appreciate if you could share your thoughts in the comment section whether you think these partners positive stock movement is an indication that Nvidia growth is positive and set to grow further.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.