Nvidia fell before bouncing back Monday, testing its 21-day line as China reportedly urges local companies not to buy its chips. Nvidia stock faces potentially bigger hurdles in China after Bloomberg reported that the country's regulators are urging companies not to buy its H20 chips, used for AI models.
Nvidia stock fell 1.6% to 119.46, but the shares recovered, closing flat at 121.44. The stock hit 118.15 intraday, nearly touching its 21-day line and moving toward its 50-day average. Nvidia stock investors could consider 120.70 as an aggressive entry, according to IBD analysis. The Sept. 26 high of 127.27 works as a trendline entry, with a 131.26 buy point from an unusual handle.
Other major chip stocks retreated. Nvidia chipmaker Taiwan Semiconductor shed 2.4% to close at 173.67. That's just below a 175.45 cup-with-handle buy point cleared last week.
Broadcom retreated a fraction to close at 172.50. AVGO stock edged closer to a 172.42 early entry cleared last week.
AMD lost a fraction to close at 164.08, falling back toward its 200-day line.
Beijing's move aims to give China chipmakers a boost, the report, which cited unnamed sources, said.
China is an important market for Nvidia. But the chip behemoth has grappled with U.S. government concerns about giving a major rival access to sensitive semiconductor technology.
Late last year, the Biden Administration announced tighter restrictions on export of AI chips and manufacturing equipment, triggering an Nvidia stock sell-off.
China also hopes to give its technology industry an edge, especially in AI. China tech giant Huawei is reportedly rolling out a new AI chip to challenge Nvidia.
