Summary
Nvidia (NVDA) is highly popular with positive sentiment, but caution is advised due to potential rapid sell-offs by institutions using algorithms.
Nvidia's strong technical indicators include 100% buy signals, significant price gains, and a Trend Seeker buy signal, despite recent minor losses.
Fundamental factors show impressive revenue and earnings growth expectations, but failure to meet these could result in significant stock drops.
Analysts are generally bullish with high price targets, but the stock remains volatile and speculative; diversification and stop-loss strategies are recommended.
Author's Note of Caution: Everything I read about Nvidia (NVDA) is positive (maybe too positive) and on Seeking Alpha there are 714,990 investors with this stock on their watch list. Institutions hold 65.62% of the outstanding shares and most of them are using very sophisticated trading algorithms that sometimes execute sell orders without human intervention. I predict when the ride ends, it will end in the blink of an eye, no one will see it coming and if you do not have stop losses in place you just may be the last one out the door. Just my opinion.
The Chart of the Day belongs to the semiconductor/chip maker Nvidia NVDA . I found the stock by using Barchart's powerful screening functions to find stocks with the highest technical buy signals, highest Weighted Alpha, superior current momentum and having a Trend Seeker buy signal then used the Flipchart feature to review the charts for consistent price appreciation. Since the Trend Seeker signaled a buy on 1/6 the stock lost 9.05%.
This chart is a weekly chart using price, a weekly Trend Seeker and the 50 week moving average of NVDA:
NVIDIA Corporation provides graphics and compute and networking solutions in the United States, Taiwan, China, Hong Kong, and internationally. The Graphics segment offers GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU or vGPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems; and Omniverse software for building and operating metaverse and 3D internet applications. The Compute & Networking segment comprises Data Center computing platforms and end-to-end networking platforms, including Quantum for InfiniBand and Spectrum for Ethernet; NVIDIA DRIVE automated-driving platform and automotive development agreements; Jetson robotics and other embedded platforms; NVIDIA AI Enterprise and other software; and DGX Cloud software and services. The company's products are used in gaming, professional visualization, data center, and automotive markets. It sells its products to original equipment manufacturers, original device manufacturers, system integrators and distributors, independent software vendors, cloud service providers, consumer internet companies, add-in board manufacturers, distributors, automotive manufacturers and tier-1 automotive suppliers, and other ecosystem participants. NVIDIA Corporation was incorporated in 1993 and is headquartered in Santa Clara, California.
Barchart's Opinion Trading systems are listed below. Please note that the Barchart Opinion indicators are updated live during the session every 20 minutes and can therefore change during the day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report.
Barchart Technical Indicators:
- 100% technical buy signals
- 114.25+ Weighted Alpha
- 150.06% gain in the last year
- Trend Seeker buy signal
- 1.64 - 60 month Beta
- Above its 20, 50 and 100 day moving averages
- 5 new highs and up .62% in the last month
- Relative Strength Index 46.68% (below 50% is a cautionary signal for me)
- Technical support level at 133.45
- Recently traded at $135.91 with 50 day moving average of $139.87
Fundamental Factors:
- Market Cap $3.32 trillion
- P/E 56.02
- Dividend yield.03%
- Revenue expected to grow 111.97% this year and another 51.81% next year
- Earnings estimated to increase 127.91% this year and an additional 50.55% next year
- If these lofty Analysts expectations are not met: KABOOM!
Analysts and Investor Sentiment -- I don't buy stocks because everyone else is buying but I do realize that if major firms and investors are dumping a stock it's hard to make money swimming against the tide:
- Wall street analysts issued 46 strong buy, 12 buy and 5 hold opinions on the stock
- Their price targets are between $130 and $220 (wide range) with a consensus of $173
- Value Line rates the stock above average with a price target of $185 for a 35% gain and comments:"NVIDIA Corp. continues to ride the artificial-intelligence wave. At current levels, this volatile equity is a timely selection for the year ahead and offers worthwhile appreciation potential to 2027-2029. "
- CFRA's MarketScope has a buy recommendation and a price target of $165 and comments:"Our Buy rating reflects our view of NVDA’s expanding TAM, driven by content gains from higher system sales, penetration into edge devices (autos/PCs/robotics), and software opportunities."
- MorningStar thinks the stock is fairly valued and comments:"In data center AI, we still don’t see many signs of demand slowing nor hyperscalers reducing their plans to invest in infrastructure in the year ahead. Still, we remain impressed by Nvidia’s ability to elbow out into new technology areas."
- 714,900 investors monitor the stock on Seeking Alpha. (If the music ends a lot of people will be left without a seat.)
Additional disclosure: The Barchart Chart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance and reevaluate your stop losses at least on a weekly basis.
On the date of publication, Jim Van Meerten did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
