Even though, detached-from-reality valuations and worries for a pop-up of the so-called AI bubble continue to permeate across equity markets, the AI powered rally is considered to be, amidst a mild, self-corrective cool-down phase by many investors currently.

The bombastic AI innovation project is, and is expected to be, cap-ex intensive for the frontrunners in the foreseeable future, no one is doubting that.

The gist of the story is however, whether AI will bring the revolutionary impact it promises and whether the gains will be substantial enough to justify the viability of the chosen model that spends billions of dollars in the development of it.

And this is the hazard of the story, where worries stem from. Not only is the ludicrous spending being criticized, but also the intricate interconnectedness and interwovenness of all these tech behemoths in regards to the circularity of capital flows into each other. And this is what raises eyebrows.

Hence, investors eyes now are expected to fixate upon demand. Demand acceleration, disruption or stalling. Should demand fail to keep up and an external shock event occur, this very interconnectedness and co-dependence could prove catastrophic for the entire US equity market.

In the absence of a shock event (and failure of demand keeping up) however, an orderly reallocation of capital into sectors and industries outside tech, may be the best-case scenario, dodging in a sense a dot.com-esque type event.

On deck today are the world’s most valuable company’s earnings results for the 3rd quarter, which could indeed provide critical clues about the state of the AI experiment, more specifically hints about that crucial demand function mentioned above and set the tone in how the equity market will perform near year end.

Does NVDIA have enough demand for its chip creation to keep afloat the AI rally?

Will the chipmaker report another ludicrous record-breaking quarterly revenue sum? Or will the report showcase loss of momentum and cracks in demand?

Technical Analysis

NVDA Chart Nvidia, the AI posterchild, delivers its Q3 earnings data in the aftermarket hours

Resistance: 184.50 (R1), 190.00 (R2), 208.00 (R3)
Support: 173.00 (S1), 164.00 (S2), 153.00 (S3)