Microsoft is scaling back its plans for AI chips due to delays. This move reduces their goal of relying less on Nvidia for AI computing, which ultimately helps Nvidia. Nvidia’s stock has risen by $3.66, or 2.37%, bringing its current price to $156.96. Earlier, it peaked at $157.60, close to its all-time high of $158.71 reached last Friday. Since dropping to a low of $86.62 on April 7, Nvidia’s share price has increased by about 83%. Microsoft’s stock is steady at $492.06. The slowdown also affects Marvell, which participated in chip design. Even though Marvell’s shares rose by $0.90, or 1.04%, to $77.18, they are down 30.29% this year, far from their all-time high of $127.48 from January 23. On the daily chart, Marvell’s stock trades above the 100-day moving average of $70.64 but below the 200-day moving average of $83.29. These numbers highlight the mixed effects of Microsoft’s decision on the parties involved. Initially, Microsoft is stepping back from its strategy to manufacture AI chips independently. This was meant to reduce its reliance on Nvidia. With delays continuing, Nvidia gains a short-term advantage. While Microsoft struggles with chip development, Nvidia strengthens its hold on the AI hardware market, which is evident from its share price climbing over 80% since April. Nvidia’s stock performance supports this situation. Its latest close just below $157 and nearing last Friday’s all-time high shows strong momentum. Since breaking past $100 in early summer, the stock has not consolidated or retraced significantly. Buyers have consistently stepped in with each dip, pushing resistance levels higher. The $158.71 high remains important if further price increases occur. In contrast, Microsoft’s stock price remains unchanged after this announcement. While it trades comfortably above $490, it hasn’t reacted significantly to the shift in its chip strategy. The market either expects these delays or believes there is no immediate impact on Microsoft’s overall AI position. Marvell’s recent price gains come despite long-term challenges. Down more than 30% from its January peak, its stock struggles to regain momentum. Although it trades above the 100-day moving average of $70.64, it is still well below the 200-day average of $83.29. This positioning indicates some recent improvement, but does not signal a definitive long-term recovery. It has a long way to go before reaching prior high levels. For those analyzing investment strategies, especially in stocks with directional movements and high short-term volatility, current conditions present opportunities. The rebound in some semiconductor stocks may set up situations where volatility can drop after a breakout, making premium-selling strategies appealing. However, it’s important to focus on stocks with reliable price patterns. When we look at Nvidia, there may be interest in short-term upside exposure, especially near the previous high. Activity in this area is already showing, responding to earnings and new GPU developments. Breakouts above known resistance can attract short-covering and new buyers. Conversely, if the price fails to break through that level, using iron condors or call credit spreads can minimize risk while taking advantage of implied volatility changes. Regarding Marvell, option pricing shows caution. The price movement is still uneven, and while there is some support above the 100-day average, the struggle to maintain stability above the 200-day average indicates market uncertainty. For now, taking on risk in neutral or rangebound setups, like short puts near lower support, may be more beneficial but only if there’s enough cushion. Price movements tell a story. Headlines may shape the narrative, but the actual trading data reveals the truth. By watching key levels like $158 for Nvidia and $83 for Marvell, we can adjust our risk-reward based on where supply and demand are most active. There’s no alternative to this approach.

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