NVIDIA Corporation (NASDAQ:NVDA) Price Target $410
Chipmaker Nvidia (NVDA, $348.71) has long been one of the best AI stocks to buy. While the company has built its name on high-powered graphics cards for gaming PCs, Nvidia’s chips are progressively being employed for artificial intelligence and deep learning applications.
In the first quarter, Nvidia reported that its data center division, which includes chips for intensive tasks like AI, grew revenues by 80% year-over-year, topping the $1 billion mark for the first time ever and the company’s latest development, the Nvidia A100, is already seeing robust demand and meaningfully contributed to Q1 revenues.
“The A100 offers the biggest leap in performance to date over our eight generations of GPUs boosting performance by up to 20 times over its predecessor,” CEO Jensen Huang said during the company’s Q1 conference call. “It is exceptionally versatile, serving as a universal accelerator for the most vital high-performance workloads, including AI coaching and inference as well as data analytics, scientific computing and cloud graphics.”
Nvidia also has partnered with various automakers to work on autonomous vehicles. More than 70 firms worldwide are working aggressively on developing a mass-produced self-driving car; market intelligence firm Guidehouse Insights ranks Nvidia as No. 1 among them.
The average analyst price target on shares right now is $378.98, implying just 7.67% upside. but it’s an overwhelmingly optimistic consensus – 8 Strong Buys and 24 Buys versus 7 Holds and 2 Sells – and a few analysts are starting to upgrade their price targets to reflect even more upside. Heffx, for instance, recently hiked their price target from $325 to $410, citing the company’s strong results and A100 launch.
Shayne Heffernan Trade Idea
“To be sure, basic math suggests that some of the easy money has been made. NVDA stock isn’t going to gain another 100% in under 3 months. though I pounded the table for the stock in March, even I hardly predicted the rebound would be quite this steep.
But the recommendation I gave in March still holds in May: take the long view.
I still believe that as we return to normalcy, this decade will eventually be known as the “Roaring 2020s.” And Nvidia is set to benefit from many of the major trends which will drive growth for years to come.” Shayne Heffernan PhD in Economics
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 292.11.
The projected upper bound is: 389.82.
The projected lower bound is: 311.91.
The projected closing price is: 350.87.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with NVIDIA CORP). It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 60.5290. This is not an overbought or oversold reading. The last signal was a sell 0 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 64.12. This is not a topping or bottoming area. However, the RSI just crossed below 70 from a topping formation. This is a bearish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 0 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 75. This is not a topping or bottoming area. The last signal was a sell 1 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 11 period(s) ago.
Rex Takasugi – TD Profile
NVIDIA CORP closed down -12.340 at 348.710. Volume was 33% above average (neutral) and Bollinger Bands were 52% wider than normal.
Open High Low Close Volume 366.270 367.270 346.880 348.710 19,269,476
Technical Outlook Short Term: Overbought Intermediate Term: Bullish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 340.60 282.21 232.11 Volatility: 55 101 72 Volume: 18,401,896 15,304,377 11,267,382
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
NVIDIA CORP is currently 50.2% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods.
Our volume indicators reflect moderate flows of volume into NVDA.O (mildly bullish). Our trend forecasting oscillators are currently bullish on NVDA.O and have had this outlook for the last 32 periods.
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