By Camilo Botia
Nvidia’s stock reached an all-time high of $504 on Monday, setting the stage for its fiscal third-quarter earnings report scheduled for Tuesday.
Nvidia’s stock has significantly influenced the S&P 500’s gains this year. The stock price has surged 245% in 2023, outperforming any other member of the index due to the company’s semiconductors, which are considered essential for AI development. Currently, Nvidia’s market cap stands at $1.2 trillion, surpassing Meta and Tesla, and some analysts believe that artificial intelligence still has enormous potential, with companies like Microsoft and Nvidia capitalising on this trend. For the quarterly results, analysts expect data center revenue to nearly quadruple to $13.02 billion in the fiscal third quarter, up from $3.83 billion a year earlier. Total revenue is forecast to increase 172% to $16.2 billion.
A pivotal concern revolves around how Nvidia’s management perceives the impact of recent developments in U.S.-China relations on the business. The United States recently imposed new export restrictions on selling advanced chip technology to China. While some of Nvidia’s products are included in the restrictions, the company expects no significant near-term impact on its results. In addition, given the substantial investment from shareholders this year and the limited number of alternative investment options available this week, investors will be attentively listening to Nvidia’s CEO, Jensen Huang, for signals of how demand will be in 2024.
As a result, the price of Nvidia has successfully broken the previous highest price and resistance level of $502.16, trading around $504.09, which is its new all-time high. The stock has been bullish since the beginning of November when a Hammer Candlestick Pattern took place and signalled the beginning of a bullish movement. Throughout this period, the price has consistently traded above its 100-day moving average. Pending positive corporate results, the stock could see further highs in the coming days. However, the RSI just started to signal an overbought condition on the market that might push back the price of Nvidia to its closest support below $500, at $480.88.
Looking ahead, if the corporate results or the demand forecast for 2024 do not fulfill investors’ expectations, the price could eventually reach the 100-day moving average, which is currently at $448.56.
Nvidia’s stock reached an all-time high of $504 on Monday, setting the stage for its fiscal third-quarter earnings report scheduled for Tuesday.
Nvidia’s stock has significantly influenced the S&P 500’s gains this year. The stock price has surged 245% in 2023, outperforming any other member of the index due to the company’s semiconductors, which are considered essential for AI development. Currently, Nvidia’s market cap stands at $1.2 trillion, surpassing Meta and Tesla, and some analysts believe that artificial intelligence still has enormous potential, with companies like Microsoft and Nvidia capitalising on this trend. For the quarterly results, analysts expect data center revenue to nearly quadruple to $13.02 billion in the fiscal third quarter, up from $3.83 billion a year earlier. Total revenue is forecast to increase 172% to $16.2 billion.
A pivotal concern revolves around how Nvidia’s management perceives the impact of recent developments in U.S.-China relations on the business. The United States recently imposed new export restrictions on selling advanced chip technology to China. While some of Nvidia’s products are included in the restrictions, the company expects no significant near-term impact on its results. In addition, given the substantial investment from shareholders this year and the limited number of alternative investment options available this week, investors will be attentively listening to Nvidia’s CEO, Jensen Huang, for signals of how demand will be in 2024.
As a result, the price of Nvidia has successfully broken the previous highest price and resistance level of $502.16, trading around $504.09, which is its new all-time high. The stock has been bullish since the beginning of November when a Hammer Candlestick Pattern took place and signalled the beginning of a bullish movement. Throughout this period, the price has consistently traded above its 100-day moving average. Pending positive corporate results, the stock could see further highs in the coming days. However, the RSI just started to signal an overbought condition on the market that might push back the price of Nvidia to its closest support below $500, at $480.88.
Looking ahead, if the corporate results or the demand forecast for 2024 do not fulfill investors’ expectations, the price could eventually reach the 100-day moving average, which is currently at $448.56.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice.
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