As fellow Magnificent Seven stocks Meta Platforms, Alphabet, Microsoft, Apple, Amazon.com, and highlight a massive earnings week, Nvidia doesn't report until Nov. 20. As the artificial intelligence juggernaut cools its heels and Wall Street waits, Nvidia stock has retreated below its buy point and its 21-day exponential moving average.
And emerging pressure in a later-stage base is just one reason to watch the stock. Here are five more — with an added caveat.
1. Nvidia Stock Pulls Off This Elite Trifecta
Showing its strength across key elements of The IBD Methodology, Nvidia stock has landed a spot on multiple stock lists. It makes the IBD 50, Stock Spotlight and IBD Sector Leaders, our most stringent screen. Although fellow Mag 7 member Meta joins Nvidia on the IBD 50 and Microsoft makes the IBD Long-Term Leaders list, but took a hit on Q3 earnings.
Nvidia has also secured its place on the IBD Breakout Stocks Index.
In addition to being an integral AI leader, Nvidia's track record of exceptional growth explains its prominence on these lists.
Over the last three quarters, the graphics processing unit (GPU) innovator has generated average earnings growth of 361%. In its latest fiscal quarter, reported on Aug. 28, the company generated $30 billion in revenue, marking a 122% year-over-year gain.
When Nvidia releases its performance for the latest quarter next month, analysts forecast 82% sales growth to $32.9 billion and 85% earnings growth to 74 cents per share. For the full fiscal year, Wall Street estimates 119% EPS growth to $2.85 a share. Analysts have recently revised those estimates higher.
Keeping in mind the post-earnings drops in Microsoft and Meta, as well a pullback in Google stock after Wednesday's initial jump, investors should monitor how Nvidia performs heading into its report.
See Who Joins Nvidia On The IBD Breakout Stocks Index
2. Nvidia, xAI Accelerate Largest AI Supercomputer
A second reason to keep an eye on Nvidia is its acceleration of the world's largest AI supercomputer.
On Monday, Nvidia announced that xAI's Colossus supercomputer cluster achieved its massive scale by using the company's Spectrum-X Ethernet networking platform. The Colossus comprises 100,000 Nvidia Hopper GPUs. Nvidia says the platform is designed to hyperscale AI factories.
On X, Tesla CEO Elon Musk — who owns the social media platform formerly known as Twitter — wrote that "Colossus is the most powerful training system in the world." The xAI platform is used to train xAI's Grok family of large-language modules.
3. Powering The Next Wave Of AI Robotics
A company blog post earlier this month on AI robotics showcases another reason Nvidia continues to garner attention. It noted that ChatGPT marked the "big bang moment" of generative AI, allowing answers to be generated in response to nearly any query. The service helped spur the digital transformation of work, including content creation, customer service and software development.
The blog's author — Madison Huang, director of product and technical marketing at Nvidia — wrote that physical AI has yet to have that breakthrough. Huang, the daughter of Nvidia CEO Jensen Huang, said that physical AI embodies AI in humanoids, factories and other devices within industrial systems.
According to Huang, the global market for humanoid robots is expected to reach $38 billion by 2035.
4. Detecting Fraudulent Credit Card Transactions With AWS
On Monday, Pahal Patangia, head of global developer relations for consumer fintechs at Nvidia, wrote that credit card fraud is expected to drive financial losses of $43 billion worldwide by 2026. To help address the issue, Nvidia has released a new AI workflow for fraud detection running on Amazon Web Services (AWS).
The workflow allows financial institutions to better avoid false positives and increase accuracy. Patangia says Nvidia's AI and accelerated computing platforms help these organizations manage large-scale data sets and deliver real-time AI performance.
5. Nvidia Expands AI In India
The company's developments in India provide more reasons to monitor Nvidia.
At this month's Nvidia AI Summit in India, a collection of consulting partners and industrial manufacturers announced they are using Nvidia Omniverse for next-gen factories. As India's manufacturing industry expands rapidly, manufacturers focus on AI for digitization of processes and robotics to scale operations.
India-based enterprises also use Nvidia AI to help organizations develop multilingual AI models. Using domestic AI infrastructure built on local data sets, the platform reflects a region's specific dialects, cultures and practices.
India's leading cloud infrastructure firms also continue to ramp up accelerated data center capacity. That boosts their use of Nvidia GPUs. The company says that, by year's end, these Indian firms will have expanded Nvidia GPU deployment in the country by nearly 10 times compared to 18 months ago.
Caveat For Investors In Nvidia Stock
As Nvidia stock slips out of buy range after clearing a 140.76 buy point, note that the current base is late-stage. Such patterns can succeed and lead to solid gains. However, they entail more risk than first- and second-stage patterns. In such a scenario — particularly during earnings season in a big winner like Nvidia — investors should take heed of the eight "secrets" of selling.
Nvidia dipped Wednesday but held above its sharply rising 21-day exponential moving average. That changed on Thursday, as the stock fell below that benchmark with its relative strength line dipping, declining more than 4% in below-average, but rising volume.
How Wall Street reacts to the rest of this week's slew of reports will continue to impact Nvidia. Amazon jumped late Thursday after unveiling Q3 numbers as Apple beat estimates.
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Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
