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NVIDIA Corporation, a leading player in the technology sector, shows promising stock performance and strong fundamentals, making it a compelling buy for investors with a long-term investment horizon and tolerance for some level of risk. (August 2023)
Company Overview
NVIDIA Corporation (Ticker: NVDA) is a leading player in the technology sector, heavily involved in the production of groundbreaking technology like artificial intelligence (AI), cryptocurrency systems, and digital processing hardware.
Recent Stock Performance
As of August 3, 2023, NVIDIA closed at $445.15, displaying a slight increase of $2.46 (0.56%) from its previous day. The stock traded between $438.25 and $451.18 during the day, while its 52-week trading range has been considerable; the stock price varied from a low of $108.13 to a high of $480.88.
The company's market cap stands at a significant $1.10 trillion, and trading volume for the day was 32.27 million, less than the average volume of about 48.92 million shares.
Technical Analysis
The relative strength index (RSI14), which measures the speed and change of price movements, is at 46. This suggests that the NVDA stock is neither overbought nor oversold.
The 50-day moving average stands at $418.53, indicating a bullish trend as the last close price is higher than this average. Furthermore, the 200-day moving average is $259.97, showing a strong uptrend as the current stock price is significantly above this long-term average.
The 3-month MACD, a trend-following momentum indicator, is 16.88, suggesting a positive momentum in the stock's price.
Fundamental Analysis
NVIDIA displays an Earnings per Share (EPS) of $1.91, and the Price/Earnings (PE) ratio is notably high at 233.06, suggesting that investors are currently willing to pay a high price for the company's future earnings.
Future Predictions
By utilizing the discounted cash flow (DCF) method, further value of NVIDIA's stock is perceived with a calculation of $446.50. However, when considering the expert consensus, the target high is $600, the target low is $133, the target median is $240, and the consensus is $277.20.
Recent News
Recent news indicates that NVIDIA and other AI stocks are poised for another surge as the digital progression continues rapidly. Additionally, NVIDIA is mentioned as one of the beneficial stocks to watch as potential rate hikes by the Federal Reserve could impact the crypto market. Investors are advised to adopt a 'buy-on-the-dip' strategy for the NVDA. The company's revenue growth over the past 10 years is also noted with an expectation that it may grow at an even faster pace in the coming decade due to a $1 trillion addressable-revenue opportunity.
Stock Evaluation and Recommendation
Given the current uptrend, the robust financials, and promising developments in AI and cryptocurrency spaces, NVIDIA's stock looks compelling. Investors might encounter volatility due to external factors like Fed's rate hikes and the inherent unpredictability of tech stocks.
However, there seems to be more upward potential, considering NVIDIA's broader involvement in high-growth sectors, its improved earnings, and its remarkable predicted revenue growth.
Based on the data reviewed, NVDA is a Buy for investors with a long-term investment horizon and tolerance for some level of risk. Nevertheless, investors are encouraged to carry out personal due diligence before making the investment.
