Sign InNVIDIA Stock Faces Volatility After Price Drop, Potential for Rebound and Long-Term Growth
Summary
Despite a recent price drop, NVIDIA Corporation's stock shows potential for long-term growth due to a bullish overall trend, increased demand from overseas, and a positive earnings announcement expected on August 23, 2023, though short-term weakness is possible. (August 10, 2023)
Technical Analysis
NVIDIA Corporation (ticker: NVDA) recently faced a significant price drop on August 9, 2023. Its closing price was $425.54, a drop of $21.10 (-4.72%) from the previous trading session. The corporation's shares traded as low as $421.34 and as high as $443.12, indicating an intraday volatility. The stock price is positioned slightly below the 50-day moving average (428.31), potentially indicating a short-term bearish trajectory. It is, however, still significantly above the 200-day moving average of $266.57, indicating a bullish overall trend.
The RSI14 stands at 36, indicating a nearer undervalued territory, which could potentially produce a bounce in the future. The MACD (3-month) is showing a positive value of 12.4, suggesting a bullish underlying tone despite the recent drop.
The support and resistance levels stand at $401.11 and $429.97, respectively. Any movement beyond these levels could potentially indicate a new trend direction.
Fundamental Analysis
With a market capitalization of $1.05 trillion, NVIDIA remains a key player in the technology sector. Despite its recent drop in share price, NVIDIA still trades at a high P/E ratio of 222.8, indicating high expected growth. Furthermore, the EPS stands at 1.91.
The mix of order influx and supply shortage has presented both challenges and opportunities for NVIDIA. As per the news report dated August 10, 2023, NVIDIA chips of worth $5 billion were reportedly ordered by Chinese tech giants in the face of potential US sanctions. On the other hand, due to some supply shortages, NVIDIA might experience some difficulties in meeting the demand.
The average target price, however, is projected lower than the current price, with the median value of $240 and a consensus value of $277.20.
Earnings Announcement
The next earnings announcement is scheduled for August 23, 2023. This event may provide significant insights over the corporation's financial health and market position, which might influence the stock price.
Stock Prediction
For the next trading day, on August 10, 2023, a recovery may be expected due to the high demand indicated by Chinese tech titans, potentially pulling the stock out of its current undervalued position. However, any consequences arising from the noted supply shortages could exert downward pressure on the price.
For the upcoming week, it's likely to see a volatility trade within the support and resistance boundaries ($401.11 and $429.97). The price might move upwards if the earnings announcement, due in a couple of weeks, is expected to be positive.
Final Evaluation
Given the current data and conditions, the stock for NVIDIA Corporation (NVDA) could be categorized as a 'Hold'. Despite the recent dip and high P/E ratio, the long-term bullish trend and increased demand from overseas indicate a promising outlook. The upcoming earnings announcement and the stock's position with respect to the 50 and 200-day moving averages indicates that the stock might experience some short-term weakness but possesses potential for long-term growth.
