NVIDIA Corp. (NVDA) shares slipped more than 1% in Tuesday's premarket trading, as investors took a breather from big tech. Nasdaq futures were down 1.02%, and S&P 500 futures fell 0.59%. But the real story isn't the daily wiggle; it's where NVIDIA is heading next.
The company is pushing deeper into the custom artificial intelligence chip market with something called NVHBM. According to Counterpoint Research analyst Neil Shah, this move could open a fresh growth lane for NVIDIA while turning up the heat on Broadcom Inc. (AVGO).
What Is NVHBM?
NVHBM is a clever bit of engineering. It takes the memory controller off the accelerator chip and puts it into the base die of a high-bandwidth memory stack. It also swaps the standard JEDEC memory bus for NVIDIA's own die-to-die connection. In plain English, NVIDIA is taking control of the memory subsystem, even when it's not designing the main chip.
Shah points out that this gives NVIDIA control over the memory controller, interface, and link protocol. Memory suppliers would build the base die based on NVIDIA's design. So, NVIDIA gets to sell its networking fabric, rack architecture, software, and memory subsystem to companies making custom accelerators, without having to design the accelerator itself. It's like selling the engine and drivetrain to someone else's car.
Who's In?
Amazon.com Inc.'s (AMZN) Annapurna Labs is the first disclosed customer, planning to use NVHBM with its Trainium4 AI chip. MediaTek has also jumped on board with NVIDIA's NVLink Fusion platform. Shah sees this as another channel for NVIDIA to reach custom chip customers.
But not everything NVIDIA claims checks out. Shah notes that the company compared NVHBM with HBM4E, which isn't even shipping yet, and didn't fully disclose its testing baseline. The only claim that can be verified with available data is the 67% reduction in physical interface area, based on pin-count numbers.
Broadcom's New Rival
This puts NVIDIA squarely in a market that Broadcom and Marvell Technology Inc. (MRVL) have been serving. Broadcom could actually benefit from the broader adoption of custom AI chips, but it doesn't have a comparable base-die offering, according to Shah. Marvell outlined a similar architecture back in December 2024 and has joined NVLink Fusion. That leaves Broadcom as the odd one out among major custom chip designers, with no direct NVIDIA partnership.
What the Charts Say
Despite the early dip, NVIDIA's longer-term trend is still up. The stock is trading 4.5% above its 50-day simple moving average of $208.62 and 11.3% above its 200-day SMA of $195.96. However, it's about 0.3% below its 20-day SMA of $218.75, which could be a near-term pivot point.
The relative strength index is at 54.25, a neutral reading that suggests the stock is consolidating, not overbought or oversold. The moving averages are in a bullish alignment: the 20-day is above the 50-day, and the 50-day is above the 200-day.
Key resistance is around $228, and a stronger rally could put the 52-week high of $236.54 back in play. Support is near the 200-day SMA, with the $190 level as a secondary floor.
At 27.9 times earnings, the valuation is rich, reflecting high expectations. Analysts are still bullish, with a consensus Buy rating and an average price target of $349.15. On Aug. 27, Citigroup and Mizuho both raised their price targets to $315, while JPMorgan bumped its to $320. Citigroup has a Buy, Mizuho an Outperform, and JPMorgan an Overweight.
Price Action
NVIDIA shares were down 1.35% to $217.80 in Tuesday's premarket session, according to market data.
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