NVIDIA Stock Rises 18.72% Amid Eased China Export Rules, But Long-Term Outlook Remains Cautious

Technical Analysis

NVIDIA Corporation's (NVDA) stock closed significantly higher at $114.33 on April 9, 2025, with an 18.72% increase, heavily influenced by recent news regarding relaxed restrictions on chip exports to China. Despite this rally, the Relative Strength Index (RSI) at 46 indicates the stock is still neither overbought nor oversold, suggesting a balanced momentum. The stock is positioned between the support level of $97.64 and resistance at $118.42. However, with the price remaining below both the 50-day ($119.96) and 200-day ($126.71) moving averages, the longer-term trend appears bearish. The Moving Average Convergence Divergence (MACD) indicator at -2.10 also supports this outlook, highlighting a downtrend, though the recent price jump has begun to close the gap.

Fundamental Analysis

NVIDIA's fundamentals paint a complex picture. A PE ratio of 38.89 suggests the stock is valued on the higher side compared to industry norms, signifying optimistic growth expectations. The Earnings Per Share (EPS) sits at $2.94, indicating profitability. The company's market capitalization at $2.79 trillion underlines its status as a major player in the tech sector, while a high volume of 605.95 million shares traded on April 9 points to heightened investor interest. The discounted cash flow (DCF) valuation is $162.76, well above the current price, hinting at potential undervaluation. Upcoming earnings on May 28 could provide critical insight into future performance.

Short-term and Long-term Predictions

For the next trading day, NVDA might face resistance as it approaches $118.42, especially in the aftermath of a surge and potential profit-taking. Looking into the upcoming week, with the easing of export restrictions and a broader market recovery after tariff-related shocks, further positive adjustments in stock price might occur, contingent on market sentiment stabilization.

In the long term, NVIDIA remains well-positioned in the semiconductor industry with strategic advantage in AI and GPU technologies. The company’s relief from export restrictions on its H20 chip to China enhances its revenue potential and reaffirms diplomatic agility, which is crucial in geopolitical uncertainty.

Intrinsic Value and Investment Potential

The perceived intrinsic value via DCF suggests that NVDA could be undervalued, providing an appealing entry point for long-term investors. With analysts setting a consensus target price at $180.04 with the potential high at $250, the intrinsic value remains attractive. However, the macroeconomic challenges posed by international trade policies and potential market volatility must be considered in evaluating long-term prospects.

Overall Evaluation

NVIDIA is a 'Hold' candidate. Despite the favorable intrinsic valuation and promising long-term industry position, immediate concerns such as high valuation metrics, technical downside risks, and geopolitical uncertainties warrant caution. Current sentiment and the anticipation of further industry developments should guide investor actions moving forward.