Will Nvidia (NVDA) Make A Run Above $135?
We have seen $NVIDIA (NVDA.US)$ stock reversed lower from its high of $138.57 on 20 June as other chip stocks with artificial intelligence exposure also fell.
Since then, Nvidia has not been able to clear $130 level, the best stock price is at $128.28 which is recorded on 03 July before the holiday.
So now as investors in Nvidia, the question remains whether Nvidia stock is a potential buy now and will it make a run above $135 again?
Barclay's analyst and Susquehanna analyst raised the price target to 145 from 120, split adjusted. Supply chain checks were reassuring and showed that the transition from Hopper chips to Blackwell will be smooth.
Servers AI Chips Demand Growing
Earlier in June, Nvidia said it plans to roll out its most advanced artificial intelligence platform in 2026. The AI chip leader will also use next generation memory to improve process time.
Also in early June, Foxconn announced its plans to build an advanced computing center in Taiwan using Nvidia's Blackwell chips. Nvidia has teamed up with Foxconn to build data centers to expand into autonomous driving and the electric vehicles market. While leading electric-vehicle player $Tesla (TSLA.US)$ uses Nvidia's chips, it plans to custom build them in-house in the future.
Impressive Showing From First-Quarter Results
After the fiscal first-quarter results beat the estimates once again on 22 May 2024, the stock price of Nvidia rose to its record high before its stock split.
Nvidia sales 262% to $26 billion while earnings of $6.12 per share were 461% higher. The AI leader has also teamed up with Microsoft to make the latest AI software available on Nvidia's graphic processing units.
But after its stock split, I think we should look forward to its fiscal second-quarter results which is due on 15 August 2024 with market expecting a $0.64 EPS forecast.
Recently purchase by Nancy Pelosi did help to push the stock price up, but does Nvidia has the ingredients to make another good run at its upcoming earnings?
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 Chief Executive 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 in late 2022 and early 2023. But then the company achieved record top- and bottom-line growth in the two most recent quarters.
For the Generative AI revenue growth which is important for Nvidia AI chip, we are looking at a consistent growth of 3% to 12% from 2024 to 2032.
Analyst Price Target Looks Promising If Nvidia Continue Its Rally
Based on 41 Wall Street analysts offering 12 month price targets for Nvidia in the last 3 months. The average price target is $135.81 with a high forecast of $200.00 and a low forecast of $90.00. The average price target represents a 5.87% change from the last price of $128.28.
I believe Nvidia might tried to make a run towards $130, if it can clear this level, then we might see a chance of $135 close to its fiscal second-quarter earnings report on 15 August 2024.
Can Nvidia Go Back Above $135 Before Its fiscal Q2 2025 earnings?
Based on the supertrend that I used to predict the price target for Nvidia, there might be a pullback if Nvidia cannot clear its previous high of 138, if it is able to clear it, then we could be seeing a new highs of $140.76.
This is the level at $118.04 that Nvidia cannot drop below it, if not we could be seeing Nvidia going close to $110.
For now, I will see how Nvidia trade on the price action, and demand from the traders and investors is also important.
Summary
Based on how Nvidia has performed during the first week of July 2024, we are still not seeing a strong signal that Nvidia could make a break above $130, so I think it would be better to continue to monitor the price action.
The next important point would be 15 Aug when Nvidia report its fiscal second-quarter earnings. This might be a chance for Nvidia to make a run above $135.
Appreciate if you could share your thoughts in the comment section whether you think Nvidia could only make a run after its fiscal second-quarter earnings report?
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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The wolf of Toronto : Nothing more to say. Excellent summary. There is a chance that NVIDIA can break 135 before the next earnings if the the Big Tech's earning raised thanks to AI or if they plan to spend more money in AI. Otherwise it will trade in range until the Next earnings and then will brake 140 for sure.