NVIDIA's Stock Predicted to Continue Rising Despite Volatility

Fundamental Analysis

NVIDIA Corporation (NASDAQ: NVDA) ended trading on July 21, 2023, down by -2.66%, closing at $443.09. The company has a massive market capitalization value of $1.09 trillion, indicating a considerable presence in the sector. With 2.47 billion shares outstanding as of this date, it has a high availability of stocks for trading. NVIDIA's earnings per share (EPS) stand at $1.93, contributing to a relatively high price-to-earnings (PE) ratio of 229.58, pointing at investors' high expectations for the company's future growth.

However, Nvidia's valuation might put investors in a tricky spot, as the high PE ratio could signify an overvalued company. It is important to consider how much the company justifies this valuation by looking at factors like revenues, earnings growth, and the overall strength of its business model.

It is also noteworthy that NVIDIA's share price has been volatile, with the share price seeing a year low of $108.13 and a year high of $480.88. At the last trading session, the day's low was $442, and the day's high was $458.66, giving an idea about the short-term volatility in the price.

A look into the company's average volume shows an impressive exchange of approximately 48.55 million shares, though on the recent trading day, the volume was significantly higher at 75.12 million. This high trade volume may indicate increased interest from investors, which sometimes precedes a rise in stock price.

The company's relative strength index (RSI14) stands at 59, which sits in the neutral category, showing neither overbought nor oversold conditions.

Technical Analysis

The 50-day moving average for the company stands at $389.62, while its 200-day moving average is considerably lower at $244.99. These values indicate that the stock is in an uptrend, reinforcing the bullish sentiment in the market.

Further, the MACD (3-month) figure of 9.40 denotes a bullish trading pattern, given that a positive MACD typically signals an upward price direction.

However, NVIDIA's discounted cash flow (DCF) value is $444.44. This is higher than the current stock price, indicating potentially undervalued shares and hence an investment opportunity.

The high, low, and median target prices as per consensus estimates stand at $600, $133, and $240, respectively. Therefore, the vast discrepancy in price targets suggests that analysts are not in agreement on the stock's future course, signaling potentially more volatility ahead.

News Impact and Predictions

Relevant news suggests that NVIDIA is gaining popularity due to its products' computing power required for artificial intelligence. Also, NVIDIA's hardware demand has surged given its extensive use by major firms like Tesla. This news could drive a positive sentiment among investors and possibly further enhance the share price in upcoming days.

Considering both the technical and fundamental factors along with recent news, NVIDIA's stock price is predicted to continue its upward trend and may close higher on the next trading day, July 24, 2023.

The upcoming week might also witness a rise in price due to bullish technical indicators and positive news flow. However, given the volatility, it's suggested to keep a close watch over the market trends.

Final Evaluation

Given the increasing demand for NVIDIA's products, positive technical indicators, and high liquidity in terms of volume, NVIDIA looks promising for long-term investment. However, due to the high PE ratio and potential volatility, it is recommended to take a 'Hold' position for now until there's more clarity on its earning announcement on August 23, 2023.

However, the unpredictable nature of the stock market necessitates regular tracking of the stock's performance and sentiment, and market trends should not be ignored. The decision to hold, buy, or sell should be made independently by each investor based on their risk profile, investment duration, and individual financial goals.