Nvidia stock is on fire, jumping 5.4% in the past 24 hours to reach $123 as of May 13. This explosive rally follows a powerful comeback from its early April low of $86.62, a stunning 35% gain that has caught investors’ attention. The stock’s recent surge has pushed it above its 21-day and 50-day moving averages, signaling strong short-term bullish momentum. But there’s a major hurdle ahead, the 200-day moving average, a technical level that has historically acted as tough resistance. If Nvidia can break through it, the path could open toward even higher gains.

Momentum indicators support the rally. The Relative Strength Index (RSI) has moved above 50, showing growing buying pressure. However, there’s a note of caution: The Accumulation/Distribution Rating is “D-“, hinting at the possibility of large institutional investors disposing more than acquiring stock. Therein lies the possible contrast between an upward price movement and an underlying volume strength which could suggest that the rally is more driven by retail traders than institutional flows. However, excitement among investors remains high owing to Nvidia’s dominance in AI and semiconductors.

Trading volume has been surging, especially after positive developments in Nvidia’s AI technology. If this momentum continues, a breakout above the 200-day average is possible. On the flip side, falling volume could mean the rally is losing steam.

Why Nvidia is Rallying: Trade Hopes and AI Demand

With hopes rekindled by U.S.-China trade talks, the broader tech market has gained momentum. As U.S.-China trade tensions lessen and do not threaten the imposition of new tariffs in the foreseeable future, a slight upturn is being sensed amongst tech stocks with Nvidia receiving the greatest advantage. It is Nvidia’s glorifying position as a leader in AI and gaming that in the eyes of investors gives it the additional weight to be considered a name to reckon with. 

On the other hand, this trade deal has calmed investor nerves and boosted confidence in semiconductor stocks. At the same time, demand for AI-powered solutions worldwide has remained very strong, which means Nvidia has been put in a solid place for future growth.

Competition and Geopolitical Risks

Nvidia seems to be having difficulties, notwithstanding its aggressive market presence. The growing advances made in AI chips by Chinese companies mean stiffer competition for Nvidia. Besides, there is news that the H20 chips made by Nvidia may face restrictions from the U.S., which in turn could impact their sale in important markets. Furthermore, global supply chain problems remain a risk factor for Nvidia’s manufacturing operations. Regulatory scrutiny is rising, and this reality does not correspond to what lies ahead for the company.

All Eyes on May 28: Earnings Could Be the Catalyst

The next big event for Nvidia is its earnings report, which is expected around May 28. This could be the make-or-break moment. Investors will be watching closely for performance in two critical areas: data centers and gaming. If data center revenue is strong, it could ease concerns. Solid gaming results could also boost investor sentiment. Most importantly, Nvidia’s guidance for the next quarter will shape expectations and likely drive the next big move in the stock.

Technical Outlook: Breakout or Breakdown?

In the short term, Nvidia is facing key resistance at the $130 level the same as its 200-day moving average. If it fails to break this barrier, the stock might consolidate between $115 and $130 until the earnings report provides a trigger. If Nvidia smashes through $130, the next target could be $150, especially if backed by strong earnings and positive guidance. However, if the stock slips below $115, it might fall back to $105 support.

Nvidia remains a heavyweight in the AI and GPU space. Its recent surge is powered by investor optimism, strong AI demand, and trade relief. But rising competition, geopolitical risks, and upcoming earnings make the next few weeks crucial. With eyes locked on $130 resistance and the May 28 earnings report, Nvidia could be on the edge of another major breakout or a sharp reversal.