Sign InNVIDIA Corporation (NVDA) Shows Potential for Upside Despite Recent Sell-Off
Summary
NVIDIA Corporation (NVDA) closed at $460.18 on August 25, 2023, experiencing a decrease of $-11.45 (-2.43%), but despite the recent sell-off, the commitment to AI and sustained resilience suggest future upward potential, making it a 'Hold' for now.
Technical Analysis
NVIDIA Corporation (NVDA) closed at $460.18 on August 25, 2023, experiencing a decrease of $-11.45 (-2.43%). It traded with a volume of 91.57 million shares, significantly higher than the average volume of 51.48 million shares. The stock's 52-week high is $502.66, while the 52-week low stands at $108.13.
In relation to moving averages, the stock is trading above both the 50-day and 200-day moving averages, set at $440.60 and $285.19 respectively. This indicates a general uptrend for the stock. However, the MACD (3-month), which stands at -8.98, signals a bearish trend. The stock's RSI14 is at a neutral level of 52, showing neither an overbought nor oversold condition.
In terms of market volatility, NVDA's ATR at 4.39 reveals moderate volatility. The stock's immediate support lies at $454.69, while a price break could take it to the next resistance level at $469.67.
Fundamental Analysis
NVIDIA Corporation holds a market capitalization of $1.14 trillion. The company's earnings per share (EPS) stands at $1.93 and it has a rather high P/E ratio of 238.44, indicating investors are willing to pay a high price due to expectation of future earnings growth. The company has approximately 2.47 billion shares outstanding.
Target consensus shows an expected price of $335.77 with a high target of $800 and a low target of $133. According to analyst rating consensus, most advise a "Buy" with 36 for 'Buy', 2 for 'Hold', and 1 for 'Sell'. Where there are no strong buy or strong sell suggestions.
In recent news, the company's valuation was perceived as high, causing it to sell off after its blockbuster earnings report. However, NVIDIA is seen as one of the long-term winners of generative AI, indicating a promising future.
Despite retreating, NVIDIA is still a huge player in the AI and accelerated computing revolution, staking its future on these rapidly developing fields – a key shareholder selling point worth considering.
Based on the discounted cash flow (DCF), the intrinsic value of NVDA is $461.53 per share.
Stock Predictions
Given the overall technical indicators and the ongoing strong commitment of NVIDIA to AI and computing advancements, the stock price could rebound slightly to confront the resistance level within the next trading day, August 28.
For the upcoming week, taking into consideration market volatility, the average volumes, and general market trends, NVDA could range in a volatile phase. However, continued advancements in the company's AI segment may serve as a catalyst for the stock to move upwards.
Final Evaluation
Given the analysis above, NVDA can be considered as a 'Hold' for the moment. This is due to its high P/E and recent sell-off; however, its commitment to AI and sustained resilience above the 50-day and 200-day moving averages suggest a future upward potential. The consensus recommendation of 'Buy' by various analysts further supports this perspective. However, investors need to keep a close eye on the market trend and company's AI advancements. In this volatile phase, it might be wise to wait for a more favorable entry point.
