NVIDIA Shows Strong Technical Momentum Amidst Fair Valuation and AI Growth Prospects

Technical Analysis

NVIDIA (NVDA) closed at $141.72 on June 6, 2025, marking a 1.24% increase from the previous day. The intraday range remained tight between $141.51 and $143.27, testing near-term resistance at $141.92. The Relative Strength Index (RSI) of 60 indicates moderately bullish momentum without reaching overbought conditions. The stock is comfortably above its 50-day ($118.40) and 200-day ($127.22) moving averages, suggesting a sustained uptrend. The MACD of 9.88 further supports positive price momentum. Average true range (ATR) of $3.27 suggests moderate daily price volatility. Key support is established at $139.19, with a calculated stop-loss level at approximately $136.97. The volume on June 6, about 153 million shares, is below the 3-month average volume of 269 million, indicating slightly lower trading activity in the short term.

For the next trading day (June 9, 2025), price action may see resistance near $141.92. A decisive breakout above this level could target price action toward the intermediate resistance zone near the year-to-date high of $153.13. For the upcoming week, given the positive momentum and technical setup above moving averages, the stock should hold above support and may attempt to reclaim gains toward $145–$148, barring sectoral or market-wide adverse moves.

Fundamental Analysis

NVIDIA carries a market capitalization of $3.46 trillion, signifying a dominant position in the semiconductor and AI hardware markets. With a trailing twelve months (TTM) earnings per share (EPS) of $3.09, the stock trades at a price-to-earnings (P/E) ratio of 45.86—elevated but justifiable given its growth profile and leadership in AI. The minimal dividend yield of 0.03% (TTM) reflects NVIDIA’s focus on growth and reinvestment over income generation.

Discounted cash flow (DCF) analysis yields an intrinsic value of approximately $143.01, closely aligned with current market price, suggesting the stock is fairly valued at present. Consensus price targets center around $173.33, with a high of $190 and low of $150, reflecting analyst confidence in near-to-mid-term appreciation potential. The upcoming earnings announcement scheduled for August 27, 2025, remains a key catalyst for reassessing valuation given the company’s exposure to AI adoption and semiconductor cycle dynamics.

Despite recent investor enthusiasm for AI, noted in the 850% share price appreciation since early 2023 and staples of recent news coverage, NVIDIA faces competitive pressure and broader market volatility in the semiconductor sector. Comparisons to peers like Palantir highlight divergent stock performance themes but reinforce NVIDIA’s status as a core AI infrastructure provider. Partnerships with firms in power architecture and AI applications support NVIDIA’s fundamental growth trajectory.

Intrinsic Value and Long-Term Investment Potential

The fair value near $143, aligned with stable fundamentals and strong positioning in AI and data center markets, suggests reasonable valuation discipline. Over the long term, NVIDIA's dominance in GPUs for AI training, inference, and high-performance computing underpins fundamental growth. Expanding into power electronics and leveraging ecosystem partners bolster recurring revenue streams and technological moat.

The stock’s premium valuation reflects expectations for sustained earnings growth. While cyclical semiconductor risks persist, NVIDIA’s entrenched position in AI hardware and software ecosystems provides a structural growth advantage. Long-term investors focused on AI innovation and tech dominance may view NVIDIA as a core holding, albeit with the caveat of periodic valuation volatility.

Overall Evaluation

NVIDIA exhibits strong technical momentum supported by solid fundamentals consistent with fair valuation. The near-term technical outlook is cautiously optimistic with resistance near $142 and key support levels intact. Fundamentals justify the current multiple given growth prospects in AI and semiconductors. Analyst consensus and target prices indicate upside potential in the mid-$170s.

Classifying the stock within a tactical framework, it stands as a Buy candidate for investors seeking exposure to AI-driven semiconductor growth, balanced by close monitoring of liquidity and sector cycles. The combination of a favorable technical setup, intrinsic valuation near market price, and robust fundamental positioning supports this stance.