Nvidia stock is struggling to get past its 50-day moving average, after rebounding from a recent sharp fall below that threshold. Now, investors await Nvidia's planned May 22 earnings while several of its fellow Magnificent Seven stocks are reporting this week, including Tesla (TSLA) — which disclosed results Tuesday — Google-parent Alphabet (GOOGL), Microsoft (MSFT) and Facebook-parent Meta (META).
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IBD MarketSurge's chart tools show that Nvidia (NVDA) is finding the 50-day moving average a level of resistance. But its stock chart also shows that its relative strength line, which compares the company's performance to the S&P 500, is beginning to pick up after sliding since mid-March.
Prior to this week, Nvidia shares were giving back gains from Nvidia's GTC conference for artificial intelligence AI developers in March. Shares rallied after a huge 239% run in 2023. And despite last week's pullback, the stock is up 66% so far this year.
Analysts' Bullish Price Targets For Nvidia Stock
After the March conference, UBS analyst Timothy Arcuri increased Nvidia's target price to 1,100 from 800 while maintaining a buy rating.
Arcuri said that following the Blackwell platform launch, "We believe Nvidia sits on the cusp of an entirely new wave of demand from global enterprises and sovereigns — with each sovereign potentially as big as a large U.S. cloud customer."
Ahead of the conference, Truist analyst William Stein raised his price target on Nvidia stock to 1,177 from 911. He sees stronger demand in 2024 and 2025 for Nvidia's chips. Analysts at HSBC also increased their price target, going to 1,050 from 880. Both Truist and HSBC maintained a buy rating on the stock.
Analysts at Bank of America also recently raised their price target, going to 1,100 from 925.
Nvidia Stock: A Beat-And-Raise Fourth Quarter
Nvidia delivered yet another beat-and-raise quarter in February. Earnings of $5.16 a share on sales of $22.1 billion beat fourth-quarter views of $4.59 and $20.4 billion, respectively.
Earlier, the company said the limited supply of AI chips was the biggest challenge to growth. Customers may also wait for the next-generation B100 chip that is expected in coming quarters. Baird analysts recently said this was a good thing. B100 chips will have better performance and will likely have a higher average selling price, analysts said.
The maker of AI chips also disclosed its recent stakes in several smaller artificial intelligence plays in a filing with the Securities and Exchange Commission.
Nvidia Stock's Blockbuster Results
Nvidia's current stock move traces back to late 2023. At that time, shares broke out of a double-bottom base with a buy pointof 476.09 in strong volume ahead of third-quarter results in November.
A week before reporting the results, Nvidia announced at the SC23 supercomputing conference in Denver plans for a new artificial intelligence computing platform and an advanced data-center chip.
Despite a blockbuster quarter, shares fell after the earnings report but found support at the 50-day moving average. That allowed the stock to form a flat base with a buy point of 505.48. The company said profits came in at $4.02 a share.
That came on sales of $18.12 billion for the period ended Oct. 29. Analysts polled by FactSet had expected earnings of $3.37 a share on sales of $16.19 billion.
Compared with the year-ago quarter, Nvidia earningssoared 593%, while sales saw a 206% spike.
Demand from data centers was the chief reason. Nvidia's data-center sales jumped 279% from the year-earlier period to a record $14.51 billion. Data-center sales also increased 41% from the July-ended quarter.
AI Products Drive Growth
Nvidia has earned a reputation for being a trailblazer. The company was an early pioneer in the graphics processors that many say drastically improved computer gaming. Along with gaming, Nvidia chips now are used in such industries as health care, automobiles and robotics.
In March 2023, generative AI took a leap forward with OpenAI's ChatGPT. According to Nvidia's CEO Jensen Huang, Nvidia's AI-capable supercomputer paved the way for the "iPhone moment of AI."
That helped Nvidia turn the tide on its results. It reported three quarters of declining year-over-year sales and four quarters of tapering earnings. But then the company achieved record top- and bottom-line growth in the two most recent quarters.
Overall worldwide AI chip revenue will grow 26% from $53.4 billion in 2023 to $67.1 billion in 2024, according to a recent report from research firm Gartner. That is set to double by 2027 to $119 billion
Nvidia's graphic processing units help accelerate computing in data centers and AI applications.
Top Ratings For Nvidia
Nvidia stock shows exceptional technical strength and boasts a best-possible score of 99 on both its Composite Rating and EPS Rating. Its Relative Strength Rating of 98 also shows that it outperforms the vast majority of stocks in the Investor's Business Daily database.
Nvidia also is one of the Magnificent Seven stocks that led the 2023 stock rally. The other stocks are Apple (AAPL), Microsoft, Alphabet, Meta Platforms, Tesla and Amazon.com (AMZN). Some of these tech titans are customers that rely on Nvidia's advanced chips. Nvidia is also one of the "Magnificent Seven of 2024."
Nvidia stock currently ranks first in the fabless semiconductor group, which holds the lofty No. 5 spot among IBD's 197 industry groups. The AI stock frequently appears on the IBD 50, IBD Sector Leaders and Tech Leaders lists. Further, the stock is on IBD Leaderboard.
Is Nvidia A Stock A Buy?
The stock holds a D Accumulation/Distribution Rating. That shows very little buying from institutional investors in recent months.
Despite its many positives, Nvidia stock is not a buy right now. Because the stock is below the 50-day line, investors will need to wait until the stock forms a new base.
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