NVIDIA Faces Short-Term Caution Despite Strong Long-Term Growth Potential and Buy Ratings

Technical Analysis

NVIDIA’s (NVDA) last close at $135.13 on May 30, 2025, marked a 2.92% decline amid elevated volatility, evidenced by an ATR of 3.72. The stock traded within a $132.92-$139.62 intraday range, breaking slightly below its near-term resistance at $135.34. The RSI at 73 signals overbought conditions, foreshadowing potential short-term pullbacks or consolidation. Trading volume of 323 million exceeded the 280 million average, confirming notable investor interest despite the dip. The MACD remains positive at 11.07, indicating underlying medium-term bullish momentum. The price is currently above both the 50-day ($115.85) and 200-day ($126.64) moving averages, consolidating a bullish trend. Immediate technical support stands near $128.85 (stop-loss level) and a stronger support at $114.33.

Fundamental Analysis

NVIDIA’s market capitalization is $3.30 trillion, underpinned by a trailing twelve-month EPS of $3.10 and a P/E ratio of 43.59, reflecting growth premium valuation. The discounted cash flow model estimates intrinsic value at approximately $145.96, higher than the current price, suggesting undervaluation relative to intrinsic worth. Consensus analyst targets show a bullish sentiment with a median target of $175 and high estimates reaching $190, implying significant upside from current levels. Analyst ratings overwhelmingly skew positive, with 57 out of 75 analysts assigning strong buy or buy ratings and only three sellers, reinforcing a positive fundamental outlook.

Recent sector news highlighting NVIDIA’s involvement in strategic alliances, including the OpenAI joint venture with Oracle and SoftBank, hints at expanded leadership in AI-driven infrastructure. Despite volatility from tariff uncertainties, NVIDIA’s technology positioning in AI and computing infrastructure bolsters its medium and long-term growth prospects.

Near-Term Stock Performance Prediction

For the next trading day (June 2, 2025), short-term technical indicators suggest a cautious stance given the overbought RSI and recent profit-taking pressure. Prices may test support near $128.85–$130 before attempting a recovery. The resistance near $135.34 remains a key level to validate a renewed upward move.

Over the upcoming week, assuming no adverse macroeconomic triggers, NVIDIA is expected to trade with a cautious bullish bias, hovering between the $130-$140 range. Continued heavy volume and positive sector momentum could enable a successful test and breakout above $135.34, setting the stage to challenge the recent high of $153.13.

Intrinsic Value & Long-Term Investment Potential

The DCF intrinsic value of $145.96 and premium analyst price targets demonstrate confidence in NVIDIA’s long-term cash flow generation and growth trajectory, particularly fueled by AI and data center markets. The company’s strategic alliances and robust product pipeline reinforce a durable competitive moat. The current valuation, while elevated on a P/E basis, is supported by solid earnings growth expectations and technological leadership in fast-expanding sectors.

For long-term investors, NVIDIA’s fundamentals and innovation-driven roadmap support sustained appreciation potential, though valuation levels warrant monitoring for entry points during meaningful price corrections or consolidations.

Overall Evaluation

NVIDIA currently classifies as a Buy candidate based on strong fundamental backdrop, positive analyst consensus, and technical trend alignment despite short-term overbought signals and volatility. The intrinsic value exceeds the market price, supporting upside from present levels. Near-term caution is advised given sharp recent declines and RSI overextension, but the longer-term growth story remains compelling in the evolving AI and compute markets.