Nvidia Corp‘s NVDA stock has more than tripled in 2023, growing from $143.15 on Jan. 3 to $488.30 as of Dec. 22. The semiconductor titan, with a market capitalization of $1.2 trillion, has seen its earnings and revenue increase in tandem with its stock. Nvidia’s 2023 surge can be attributed to its graphics cards that have been and are in high demand due to their use in training AI models.
The technicals look bullish. The 50-day SMA crossed over the 100-day SMA in early December, and the stock is trading above the $476 level, which acted as a key resistance area in July and mid-October, infusing some confidence among traders.
Nvidia’s stock valuation looks expensive at first at a forward P/E of 39.70. However, if one looks at peers such as Advanced Micro Devices AMD trading at 52.53 forward earnings and Intel Corp INTC at 50.33, Nvidia might not look that expensive after all.
It’s important to note that there seems to be a bearish divergence in the OBV (On-Balance Volume) indicator for NVDA stock, which could suggest a potential consolidation phase. The OBV tends to decrease when the volume on down days surpasses that on up days. Therefore, a declining OBV may indicate negative volume pressure, potentially hinting at future lower prices. Given these observations, a cautious approach may be advisable when considering trades in NVDA stock.
So, the technical indicators for NVDA stock appear to present a mixed picture.
On the fundamental side, Nvidia’s guidance points to 2024 growth that may be more robust than what Wall Street anticipates. A potential acceleration in the data center GPU shipments indicates an anticipated significant increase in the company’s sales. Nvidia investors are, thus, expecting the company to report a large boost in earnings next year, which would propel the stock price higher.