Sign InNVIDIA Corporation (NVDA) Stock Analysis: Potential Upside Amidst Market Uncertainty
Summary
With a last close of $411.17 on June 28, 2023, NVIDIA Corporation's stock experienced a -1.81% change, signaling a potential downside risk, but with a strong upward trend and the possibility of benefiting from a chip export ban in China, it is recommended as a 'Hold' with a possibility to 'Buy' on dips for long-term investors. (Date of analysis: June 28, 2023)
Fundamental Analysis
NVIDIA Corporation (NVDA), a major player in the semiconductor industry, posted a last close of $411.17 on June 28, 2023. The change recorded was -1.81% bringing the stock in the red; however, it is necessary to consider additional information for a deeper understanding of its performance. The company's earnings per share (EPS) is $1.91, and it holds a PE ratio of 215.27, denoting a significant premium compared to other players in the industry, suggesting that the investors are willing to pay more for a share.
The market cap of NVIDIA Corporation stands at approximately $1.02 trillion, making it one of the largest corporations on NASDAQ. The volume of traded shares in the last trading session was around 57.35 million, higher than the average volume of 47.37 million. This indicates increased investor interest in the stock.
In terms of stock movement, it has experienced a wide range in price during the year, with the lows recorded at $108.13 and the highs at $439.9. The 50-day moving average stands at $338.08, and the 200-day moving average at $220.39, both significantly lower than the current price, indicating a strong upward trend. The RSI14 is at 65, which is close to overbought territory but doesn't necessarily signal an immediate price reversal.
On the news front, there is talk about a chip export ban in China for U.S. made computer chips which could work in NVIDIA's favor by helping it catch up on backlogs. Meanwhile, market targets vary from a high of $600 to a low of $133 with a median target at $240 and a consensus at $261.29, which is notably lower than the current price.
The MACD (3-month) of $33.89, significantly above zero, suggests a strong bullish sentiment.
Stock Prediction & Recommendation
For the next trading day on June 29, 2023, NVIDIA's stock price might stay close to the range depicted by the last closing price and DCF analysis, with potential room for upside given the strong upward trend. Taking into account the recent news and technical indicators, an ongoing bullish momentum is expected for the following week as well.
Despite trade restrictions concerns, NVIDIA's stock hasn't shown a considerably bearish signal just yet. Taking into consideration all the above analysis and given the company's size, market position, and current momentum, NVDA is a 'Hold' with a possibility to 'Buy' on dips for long-term investors, especially if it manages to take advantage of the speculated chip export ban in China. However, the high PE ratio suggests a potential downside risk, and investors are advised to keep a close watch on the evolving market conditions.
