A Closer Look at the Impacts of a Recent $100 Billion Tech Deal on Stock Prices
A prominent tech company recently experienced a drop in stock prices, following its most significant one-day percentage increase since July. This surge was in response to the announcement of a $100 billion investment in a leading artificial intelligence (AI) organization.
The Details of the Tech Megadeal
As part of the deal, the tech company will provide the AI organization with its latest Vera Rubin platform. The goal is to aid the AI group in constructing data centers and other AI infrastructures that can handle a minimum of 10 gigawatts of power. Both parties expect to finalize the terms of this partnership in the coming weeks.
Despite the momentary 2% decrease, the tech company's stocks have managed to gain a 37% increase in 2025, easily outperforming the broader market over the same period. This increase is largely due to significant investments from large tech corporations and sovereign customers in the company’s products, as they boost their AI capacity.
Analyzing the Tech Giant’s Stock Performance
After achieving a record high last month, the tech company's stocks consolidated within a symmetrical triangle before breaking out from this pattern. This breakout suggests a continued rise in the stock price, with recent trading volume increases indicating commitment from substantial market players. The relative strength index has also returned to bullish territory, affirming an upswing in price momentum.
Anticipating Future Stock Price Movements
Let's determine two possible bullish price targets for the tech company’s stock, considering the potential for more buying. We'll also identify key support levels to watch during possible future retracements.
- Bullish Price Targets: Using the measured move technique, investors can predict an initial price target if the stock reaches a new all-time high. This technique involves calculating the percentage change between the symmetrical triangle’s two trendlines at their widest point and adding it to the pattern’s top trendline value. For instance, applying a 16% increase to $179 projects a target of $207.64, about 13% above the recent closing price.
- Long-term Forecast: For a long-term price target, investors can use bars pattern analysis, which uses previous trends to predict future directional movements. When applied to this tech company's chart, we can predict a potential price target of around $255, nearly 40% higher than the recent closing price.
This previous rally accelerated after breaking out above the 200-day moving average, potentially hinting at how a new uptrend might develop following the recent decisive breakout above the 50-day moving average.
Key Support Levels to Monitor
During possible future pullbacks, investors should initially watch the $165 level. This level could serve as a support near a trendline that connects a series of price movements on the chart dating back to early July. A larger stock drop could lead to a retest of lower support around $150. Investors could consider buy-and-hold opportunities in this region, close to several peaks that appeared on the tech company's chart between the previous year and the start of this year.
It's important to note that the observations, viewpoints, and analyses presented here are for informational purposes only. Always conduct thorough research and consult a financial advisor before making investment decisions.