Sign InSummary
NVIDIA Corporation is a global technology company well-known for its advancements in the field of artificial intelligence, and with its oversold status and bullish long-term trend, it is considered a 'Buy' despite its high valuations and sector vulnerabilities. (Date of analysis: September 25, 2023)
Company Overview
NVIDIA Corporation (ticker: NVDA) is a global technology company well-known for its advancements in the field of artificial intelligence. The company is listed on the NASDAQ exchange and enjoys a market capitalization of roughly $1.04 trillion. As of the last close on September 25, 2023, NVDA is trading at $422.22.
Technical Analysis
NVIDIA's Relative Strength Index (RSI) of 19 suggests that the stock is currently in the oversold range and may witness a rebound in the near future. This is further supported by the Average True Range (ATR) of 3.73, indicating that the stock’s price has been volatile recently.
NVDA stock is currently trading below its 50-day moving average ($453.12) and above the 200-day moving average ($314.97), signaling a bearish short-term trend but a bullish long-term trend. The Moving Average Convergence Divergence (MACD) indicator, at -1.47, also indicates bearish momentum in the short term.
The stock has seen support and resistance at $411.17 and $454.69, respectively. If it can maintain its level above the support level, we might see a bounce back towards the resistance.
Fundamental Analysis
NVIDIA's Price to Earnings (PE) ratio is currently 218.77, which is relatively high and could indicate that the stock is overvalued. However, its Earnings Per Share (EPS) of 1.93 is indicative of healthy profitability.
The discounted cash flow (DCF) value of NVDA stands at $423.57, which is quite close to its last closing price, suggesting that the stock is appropriately priced.
In terms of analyst ratings, 36 analysts call it a "buy", 2 advise to "hold" and only one suggests a "sell". The consensus seems to be a "buy" with a target median price of $265.
Recent News and Developments
Recent articles highlight that NVIDIA is a dominant player in the artificial intelligence market, which could boost its long-term growth. Another piece suggests NVDA might have the potential to multiply its value by ten in the next decade.
On the other side, a commentator has pointed out some underlying weaknesses in the semiconductors sector, in which NVIDIA plays a significant role.
Stock Price Prediction
Given the technical and fundamental data, along with the latest news developments, NVIDIA's stock is expected to make a comeback in the near-term, breaking above its 50-day moving average. However, the overall market trends and sentiment in the sector could significantly influence the stock price.
Final Evaluation
Overall, given current market sentiment, NVIDIA can be considered a 'Buy'. Despite high valuations, the stock seems poised for a possible upswing due to its oversold status and bullish long-term trend. The company's dominant position in the AI market and its healthy growth prospects further support this recommendation. Of course, potential investors should be aware of the sector's vulnerability to market volatility before making a purchase decision.
