Nvidia (NVDA), the prominent AI chipmaker, remains under scrutiny as its shares declined from a record high reached last Thursday. This dip coincides with the announcement of a significant partnership with Middle Eastern telecommunications giant Ooredoo.
Despite the absence of substantial company-specific news late last week, investors seemed to seize the opportunity for profit taking amid a broader market weakness. Nvidia’s stock has seen a meteoric rise this year, driven by the AI boom.
Bearish Engulfing Pattern Signals Potential Downside
Since bouncing off the 50-day moving average in April last year, Nvidia shares have surged, with investors viewing any dip as a buying opportunity. However, Thursday’s intraday reversal from the all-time high created a bearish engulfing pattern, a candlestick formation suggesting a possible downside reversal after a significant price increase.
Should Nvidia’s price continue to decline this week due to a shift in sentiment, investors may focus on support levels around $119 and $110, which have provided minor pullbacks over the past three weeks. Failing to hold these levels could lead the stock to revisit the $97 mark, a horizontal line connecting several previous record highs.
Nvidia Secures AI Technology Deal with Ooredoo
In a separate development, Nvidia has signed an agreement to deploy its AI technology in data centers owned by Ooredoo, a Qatari multinational telecommunications company, across five Middle Eastern countries. Ooredoo’s CEO, Aziz Aluthman Fakhroo, confirmed the deal in an interview with Reuters on Sunday.
Although the financial terms were not disclosed, Ooredoo stated that its data center clients in Qatar, Algeria, Tunisia, Oman, Kuwait, and the Maldives would gain access to Nvidia’s AI and graphics processing technology.
“Our business-to-business (B2B) clients, thanks to this agreement, will have access to services that probably their competitors won’t for another 18 to 24 months,” said Fakhroo.
This agreement emerges as U.S. officials tighten export controls on advanced U.S. chips to limit China’s access to sophisticated AI technology via the Middle East.
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