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NVIDIA Stock Surges to $1,037.99: Technical Analysis, Fundamental Outlook, and Short-Term Prediction

StockInvest.us, 4 weeks ago

NVIDIA Technical Analysis

NVIDIA Corporation's stock (ticker: NVDA) closed at $1,037.99 on May 23, 2024, surging 9.32% with a change of $88.49. The intraday price ranged between $1,015.20 and $1,063.20, marking a new 52-week high at $1,063.20. Volume for the day was relatively low at 5.70 million, compared to an average volume of 49.05 million, suggesting reduced trading activity but sustained bullish momentum.

A high RSI14 value of 78 denotes that the stock is overbought, potentially hinting at a forthcoming price correction. The 50-day and 200-day moving averages stand at $888.98 and $622.26, respectively, reflecting solid upward momentum over the medium to long term. The MACD for the past three months is positive at 34.71, reinforcing the bullish trend. It's worth noting that the support level is at $893.98, with no clear resistance defined above the current price.

Fundamental Analysis

NVIDIA holds a commanding market cap of $2.59 trillion, indicative of its dominant position in the semiconductor industry. The PE ratio of 60.45 alongside an EPS of $17.13 underscores the high valuation relative to earnings, typical of growth stocks with strong future prospects. The DCF, pegged at $529.78, shows a significant discrepancy from the current stock price, suggesting that the market anticipates substantial future earnings growth.

Reports published recently reflect a positive sentiment around NVIDIA, especially highlighting its leadership in AI and semiconductor sectors. With an earnings announcement expected on August 28, 2024, any positive performance or forward guidance could potentially drive the stock higher. Notably, no dividend contribution bolsters the focus on capital gains rather than income.

Analyst consensus points towards a target median price of $1,140, with a range between $133 and $1,400, and a consensus suggestion of 'Buy'. This broad range reflects varying expectations regarding market conditions and NVIDIA’s ability to capitalize on AI and semiconductor demand.

NVIDIA Short-term Prediction (Next Trading Day and Upcoming Week)

For the next trading day (May 24, 2024), limited indicators such as high RSI and reduced trading volume suggest potential profit-taking, leading to a minor pullback or sideways movement. However, given the positive recent earnings report and strong market sentiment towards AI, any dip could be short-lived.

Throughout the upcoming week, while some degree of volatility is expected due to a probable RSI correction, the stock is likely to maintain a strong position above the $1,000 mark, driven by robust market confidence and favorable industry outlook.

Intrinsic Value and Long-Term Investment Potential

From an intrinsic value standpoint, NVIDIA’s current price notably exceeds its DCF valuation. This discrepancy echoes the market's expectation of continued substantial growth driven by its pivotal role in AI and semiconductors. With the AI sector poised for expansion, NVIDIA is strategically positioned to harness significant future gains.

In the long term, the company’s innovation capability, extensive market penetration, and leadership in key growth sectors render it a viable candidate for continued capital appreciation, albeit at a premium valuation.

Overall Evaluation

Considering the technical and fundamental factors, NVIDIA is evaluated as a 'Hold' candidate. This conclusion reflects the current overbought technical indicators and high relative valuation against fundamental metrics like DCF, weighing against the strong growth narrative and positive market sentiment. Investors may wish to await a potential short-term correction for a more opportune entry point or hold existing positions to benefit from anticipated long-term growth.

Check full NVIDIA forecast and analysis here.