Sign InNVIDIA Corp's stock analysis reveals caution despite positive news sentiment
Summary
As of July 19, 2023, NVIDIA Corporation (NVDA) closed at $470.77 with slight dip, and while the stock is in an overbought territory with a high PE ratio and median price target below the current price, positive market sentiment, strong upward trend, and slightly undervalued DCF suggest that it can be considered a Hold for the next trading day and upcoming week.
Technical and Fundamental Stock Analysis: NVIDIA Corporation (NVDA)
Overview
NVIDIA Corporation (NVDA), closed at $470.77 on NASDAQ on July 19, 2023, marking a slight dip of 0.88% from the previous closing. The stock hit a low of $467.42 and a high of $478.18 during that session, and currently rests relatively close to their one-year high of $480.88. The overall market capitalization for this technology firm stands at $1.16 trillion.
Volume and Averages
The trading volume on that day was 42.03 million shares, slightly less than the average volume of 48.24 million. This lower than average volume can be perceived as an indication of lesser investor interest on that particular day. The 50-day moving average for NVDA's stock price is significantly lower at $382.67, while the 200-day moving average stands at $241.58, demonstrating substantial growth in the more recent term.
RSI, MACD, and PE
The Relative Strength Index (RSI14), a popular momentum oscillator, comes at 81, indicating that the stock is currently in an 'overbought' territory. This potentially warns of an impending correction or side-ways trading. The Moving Average Convergence Divergence (MACD) for the last three months shows a positive trend at 8.62, suggestive of bullish momentum. However, the high PE (Price-to-Earnings) ratio of 246.48 indicates that the stock might be overvalued.
EPS and DCF
The Earnings per Share (EPS) for NVIDIA is reasonable at $1.91. The discounted cash flow (DCF), a measure of a company's intrinsic value is $472.12, slightly higher than the last closing price, indicating the stock can be considered slightly undervalued.
Rolling Predictions
The median target set by market analysts for NVDA stands at $240.00, below its current trading price, suggesting that the market currently perceives the stock as overvalued. However, the high target stands significantly higher, at $600, indicating potential for robust growth.
Market Reactions and News Sentiment
Renowned entrepreneur Elon Musk has mentioned NVDA positively, while popular investor Cathie Wood has singled out NVDA as an attractive AI investment, signaling positive market sentiment. Despite this, Wood's firm, Ark Invest, has yet to invest, likely due to the high valuation. Overall, the news sentiment suggests optimism regarding NVIDIA’s stock performance.
Summary
Given the overbought RSI indicator, the high PE ratio, and analysts' median price target below the current price, caution is warranted despite the positive news sentiment. With the 50-day and 200-day moving averages indicating a strong upward trend and a DCF slightly higher than the last closing price, NVDA can be considered a Hold for the next trading day and the upcoming week.
