Nvidia shares recovered to $216 on Oct. 26, gaining 2.39% from Friday's closing price of $210.96, as investors weighed the semiconductor maker's growth outlook after the stock retreated from its October peak near $243.

The rebound came alongside a significant corporate development. On Oct. 27, Nvidia announced a proposed $3 billion investment in Meta Platforms, paired with an expanded collaboration on the Muse AI models. The agreement deepened the two companies' artificial intelligence partnership while reigniting debate over circular financing in the AI industry, arriving just ahead of earnings reports from Microsoft, Alphabet, and Amazon.

Nvidia's Meta Investment Draws Circular-Financing Scrutiny

NVDA stock rose even after the company committed $3 billion to Meta Platforms, a move that reflects confidence by CEO Jensen Huang and his team that Meta will continue to perform well in the coming years.

The announcement, however, has drawn renewed attention to circular investment practices in the AI sector. Circular investment describes a situation in which a company invests in another firm that then uses those funds to purchase its products. In this case, Nvidia has invested in Meta Platforms, one of its largest customers, and Meta will likely deploy the capital to buy more Nvidia chips over time. That dynamic is the crux of the debate: when a supplier's capital eventually returns as purchases of its own products, critics argue it can blur the line between independent customer demand and vendor-supported spending.

It is not the first time Nvidia has invested in its own clients. The company is one of the biggest shareholders in SpaceX, which raised $40 billion in debt this month to purchase Nvidia chips. Nvidia has also backed leading neocloud providers CoreWeave, IREN, and Nebius, all of which are its customers, and holds large stakes in OpenAI and Anthropic.

Big Tech Earnings Loom as Next Catalyst

The next major catalyst for Nvidia stock is the upcoming earnings slate from some of its biggest clients, including Microsoft, Amazon, and Alphabet. Microsoft and Google are scheduled to release results on Wednesday, with Amazon publishing its numbers a day later.

The reports matter to Nvidia because these companies rank among its largest customers, with Microsoft alone accounting for roughly 20% of Nvidia's total revenue. Their capital expenditure guidance will be closely watched: any signal that they plan to boost spending would support demand for the most advanced chips Nvidia sells to these firms.

At the same time, all three companies are also developing competing chips of their own. Google is building its TPU chips, while Microsoft and Amazon are creating Maia and Trainium, respectively. For readers tracking Nvidia, that dual role—top customers on one side, budding chip rivals on the other—makes both the capex lines and the in-house silicon commentary in this week's reports worth following closely.

Wall Street Analysts Stay Bullish

Top analysts remain highly bullish on Nvidia shares. MarketBeat places the target price at $321, implying upside of 48% from current levels. Recently, Needham and Yorkville—the latter run by Dan Ives—raised their targets to $300, while BNP Paribas has a target of $345. Cantor Fitzgerald set a target of $350, and Rosenblatt holds the highest at $390. The roughly $90 spread between the lowest and highest of those targets shows how wide the range of expectations remains even among bullish analysts.

Technical Analysis: Resistance at $225

The daily chart shows NVDA stock has rebounded from a low of $164 in March to its current level of $216, and it has remained above the ascending trendline that connects the lowest swings in March, July, and October.

The shares have also held steady above the 50-day Exponential Moving Average (EMA), and have climbed above the Supertrend indicator as well as the Ultimate Support level of the Murrey Math Lines tool at $200.

According to the analysis, the stock appears positioned for a strong bullish breakout in the near term. If that occurs, the next important resistance to watch sits at $225, which coincides with the Major S/R pivot point of the Murrey Math Lines tool—the level referenced in the stock's near-term outlook. Conversely, a drop below the key support level of $210 would invalidate the bullish view.

This article provides information, not financial advice. Stock investments carry risks, including volatility and potential losses. Readers should conduct independent research before investing.

Source: The Market Periodical