NVIDIA Sees 3.40% Gain Amid Regulatory Changes, Volatility Expected in Near-Term Trading

StockInvest.us, 4 weeks ago

NVIDIA Technical Analysis

NVIDIA Corporation (NVDA) closed at $136.24 on January 15, 2025, marking a gain of 3.40% from the previous trading day. The trading range for the day stood between a low of $131.29 and a high of $136.425. With a market cap of $3.34 trillion and an unusual spike in trading volume at 182.93 million against an average of 215.50 million, it appears that NVDA is experiencing increased market interest amid regulatory developments. The Relative Strength Index (RSI) sits at 46, indicating neutral momentum not yet in the oversold or overbought territory. The MACD value of 0.485 suggests slight positive momentum. However, NVDA trades below its 50-day moving average of $139.56, signaling near-term bearishness but is above the 200-day moving average of $119.77, indicating long-term bullish potential. Crucially, the immediate support and resistance levels are at $136.02 and $136.93 respectively, suggesting that NVDA is currently trading close to this narrow range.

Fundamental Analysis

NVIDIA's trailing twelve-month EPS of $2.53 results in a high P/E ratio of 53.85, which reflects the growth expectations already priced into the stock. This is compared to a significant DCF valuation estimate of $55.60, suggesting the stock is significantly overvalued in terms of intrinsic value. Despite recent geopolitical headwinds due to new AI chip export regulations, the company continues to innovate, with forward-looking events such as "Quantum Day." Analysts exhibit mixed sentiment, with a consensus leaning towards "Buy," albeit with some room for caution indicated by price targets ranging between $90 to $250.

Short-term and Weekly Prediction

NVIDIA Given the oscillator levels and slightly reduced volume, NVDA is likely to experience price fluctuations within the support-resistance band of $136.02 to $136.93 in the next trading day. For the upcoming week, continued volatility is expected as investors digest the implications of AI chip restrictions and look forward to upcoming events such as the GPU Technology Conference.

Intrinsic Value and Long-term Potential

While the DCF analysis indicates a intrinsic valuation misalignment, NVDA's leadership position in AI, quantum technology initiatives, and recent ETF performance bolster its long-term narrative. The intrinsic value dissonance with current pricing reflects optimism for continued innovation and market leadership, particularly in emerging tech sectors.

Overall Evaluation

Despite current regulatory challenges, NVDA remains a compelling 'Hold' for those focused on long-term technological advances. The high P/E ratio and intrinsic valuation concerns warrant a cautious short-term approach. However, the stock's market position, technological innovations, and favorable analyst consensus support its stability as a long-term asset in a technology-focused portfolio.

Check full NVIDIA forecast and analysis here.