NVDA's Stock Price Shows Volatility, but Promising Outlook Holds potential

Technical Analysis

NVDA recorded a closing price of $446.64 on August 08, 2023, a daily drop of $7.53 (-1.66%). Its intraday highs and lows were $452.42 and $440.56, respectively. Despite the single-day decline, NVDA's current price is within 90% of its 52-week high of $480.88 and up considerably from its year low of $108.13.

The stock's 50-day moving average (MA) is $428.31, while its 200-day MA is $266.57. Notably, the recent closing price is above these averages, suggesting a general upwards trend. A standout technical indicator, the MACD (3-month), sits at 14.06, further validating this upward trend. However, the RSI14 at 38 indicates that the stock is verging towards an oversold condition, meaning there might have been excessive selling pressure recently.

The ATR stands at 3.25, pointing to the stock's significant volatility. Meanwhile, a stop-loss order is set at $429.51, offering protection against potential significant losses. NVDA's current support and resistance levels are $401.11 and $454.69. Investors will watch these levels closely for breakout indications.

Fundamental Analysis

NVIDIA Corporation, of ticker symbol NVDA, has a substantial market capitalization of $1.05 trillion, maintained by an average trading volume of 57.46 million and an outstanding share count of 2.47 billion.

The firm reports an EPS of $1.91 and is trading at a high Price-to-Earnings (PE) ratio of 222.8, suggesting that it is heavily priced compared to its earnings, and investors have high expectations for the company's future revenue growth. Future price targets set by analysts provide a high target of $600, a median of $240, and a low estimate of $133. The consensus target rests at $277.2, lower than the company's current price.

Company News and Prospects

Recent news regarding NVDA's product demand and innovation suggests a favorable long-term outlook. Despite the previous-day dip, the firm's leading AI chips are reportedly sold out until 2024, while its dominance in the artificial intelligence landscape has been sensational, endorsing its market strength. Moreover, despite a 212% year-to-date (YTD) rise in its stock price, predictions indicate there is still room for growth.

Substantial data centers of CoreWeave are powered by NVDA's GPUs, furthermore characterizing CEO Jensen Huang as "the Michael Jordan of tech CEOs."

Predictions & Evaluation

For August 9th, 2023, NVDA's stock could witness an uproar as the market processes the news of the company's robust performance and increasing demand for its chips. Coupled significantly with the bullish sentiment from the news section and the MACD, the stock price might experience a rebound with the RSI hinting towards an end to the selling pressure.

In the upcoming week, despite a high PE ratio, the robust demand for NVDA's products and technological advancements could push the stock higher than the 50-day and 200-day MAs. Accordingly, the stock might continue its upward trajectory, anticipating the August 23rd, 2023 earnings announcement.

However, investors must be cautious. Given the high PE ratio and price points above the DCF and consensus target, the bull run might not persist for a long.

Evaluation

Currently, NVDA is valued as a "Hold," in summary. While the company shows significant long-term prospects, the potential for short-term volatility is considerable, given the higher-than-average PE ratio, the current price above DCF, and analyst targets. A careful approach would be to monitor the stock and reassess the position after the earnings announcement and the short-term market's reaction to the recent news. Re-entry may be favorable if the price dips towards the DCF or lower.