NVIDIA Faces Short-Term Volatility Amid Strong Fundamentals and AI Growth Potential

Technical Analysis

NVIDIA Corporation (NVDA) closed at $108.76 on March 11, 2025, with a 1.66% increase from the previous day. The stock is experiencing high volatility, with prices reaching a low of $104.77 and a high of $112.23 on the same day. The Relative Strength Index (RSI14) stands at 27, indicating that the stock is in oversold territory and may be due for a potential rebound. The Moving Average Convergence Divergence (MACD) at -0.94 suggests bearish momentum in the short-term. The trading volume of 351.04 million significantly surpassed the average volume of 268.91 million, indicating high investor activity.

NVDA is trading below both its 50-day ($130.53) and 200-day ($127.40) moving averages, which can be indicative of a continued downtrend. The immediate support level is $106.98, while resistance is identified at $118.42.

Fundamental Analysis

With a trailing twelve month (TTM) EPS of $2.94 and a P/E ratio of 36.99, NVIDIA is trading at a premium, reflecting high investor confidence in future growth prospects, particularly in the AI semiconductor sector. The dividend yield, based on TTM, stands at a modest 0.06%, indicating that the company prioritizes reinvestment into growth over direct shareholder returns.

The market capitalization is a formidable $2.65 trillion, displaying NVIDIA's significant presence in the market and its importance in the tech sector. The upcoming earnings announcement on May 28, 2025, could serve as a critical juncture for reevaluating stock performance based on the company's reported results.

The DCF model suggests an intrinsic value of $161.38 per share, which is considerably above the current trading price, portraying potential undervaluation. Analysts’ consensus target stands at $179.64, with a target high of $250, indicating a broad belief in substantial upside potential.

News Impact Assessment

Recent market tremors, partially influenced by concerns over tariff policies, have affected tech stocks significantly. However, the sustained momentum in AI infrastructure spending, backed by NVIDIA's leadership in AI chip innovation, aligns with positive long-term growth expectations. Additionally, strategic partnerships, such as the potential joint venture with Intel and TSMC, could further bolster NVIDIA's strong competitive positioning.

Short-Term and Long-Term Predictions

In the short-term, NVIDIA's stock might experience increased volatility as investors react to broader NASDAQ movements and economic concerns. The oversold RSI could lead to a technical rebound in the next trading day and week, potentially testing the resistance at $118.42. Nonetheless, caution is warranted due to the prevailing bearish MACD.

Over the long term, NVIDIA remains well-positioned to capitalize on the growing demand for AI technology, likely driving future revenue growth and stock appreciation. The intrinsic value above current prices suggests favorable long-term investment prospects.

Overall Evaluation

NVIDIA stands as a 'Hold' candidate. The bearish technical indicators and economic uncertainties present short-term challenges. However, the stock's good fundamentals, leadership in AI technology, and potential for strategic alliances offer a compelling case for sustained growth, albeit with moderated immediate expectations given current market conditions.