Sign InNVIDIA Stock Analysis: Short-term Pullback Expected, Long-term Bullish Trend Intact
Summary
On October 26, 2023, the analysis suggests that there may be a short-term pullback or consolidation in NVIDIA Corporation's stock due to negative news sentiment, but the longer-term bullish trend remains intact, making it a 'Hold' for long-term investors.
Introduction
The stock analysis presents a holistic evaluation of NVIDIA Corporation (NVDA), with observations and predictions based on the given data. The analysis incorporates both technical and fundamental analyses.
Technical Stock Analysis
On the last trading day, October 25, 2023, NVDA closed at $417.79 with a negative change of -4.31%. The lower and upper prices for the day were $415.55 and $436.5, respectively. The 50-day moving average is $448.20, while the 200-day average is $347.31, indicating that the stock has been performing above its longer-term average. The trading volume was 5.55 million, below the average volume of 49.25 million, possibly hinting at a slowing down of investor enthusiasm.
Relatively Lower RSI of 40 hints that the stock is currently not overbought or oversold. While the MACD stands at 8.50, indicating a bullish trend in the longer-term. The stock's higher volatility is signified by ATR at 3.91.
Functioning as a dynamic level of support and resistance, NVDA has a support at $416.1 and a resistance at $439.38.
Fundamental Stock Analysis
With a market capitalization of $1.03 trillion, NVIDIA is undoubtedly a key player in the industry. The EPS (Earnings per Share) is $1.93, whereas the PE (Price-to-Earnings) ratio stands high at $215.8, which could be perceived as the stock being overvalued.
The DCF (Discounted Cash Flow) value of $417.77 is nearly similar to the last close price of $417.79, suggesting that the market fairly prices the stock.
The company boasts strong analyst ratings, with 35 in favor of "buy", 3 suggesting "hold", and only 1 advising "sell". The target price consensus at $359.03 is lower than the current price, with a high target of $800 and a low target of $133.
Recent News Impact
News updates signal mixed sentiment toward NVDA. The company's bull run in 2023 may have met its end due to uncertain demand in the semiconductor market, as indicated by ASML's forecast. There's also a suggestion for shareholders to consider selling Nvidia. Nonetheless, another news piece mentioned the expanded AI partnership with Lenovo, which may positively influence the company's trajectory by integrating more AI products. NVDA stocks also dropped after Facebook parent Meta gave a lower capital expenditure forecast for 2024.
Stock Performance Prediction
Predicting the stock price for the next trading day, October 26, 2023, and the upcoming week based on the above analysis and indicators, it appears that there might be some short-term pullback or consolidation around the support level due to recent selling pressure and negative news sentiments. However, longer-term bullish trend still seems to be intact, backed by strong fundamental aspects like its AI leadership and strategic partnerships.
Final Evaluation – Buy, Hold or Sell?
In conclusion, despite the short-term downward pressure, NVDA can be classified as a 'Hold' for long-term investors who believe in NVIDIA's ongoing leadership in Artificial Intelligence and its strategic partnerships that could pave the way for future growth. However, short-term traders should be cautious and closely monitor the moves given the current volatility.
