nvidia (NVDA), a giant in data centers and games, in 2023. The chip giant is seen as one of the biggest winners in the AI ​​boom. Is Nvidia Stock A Buy Now, With Dividend Due Soon?


Semiconductors, AI News

On August 9, it was financial times It reported that Chinese internet giants are rushing to acquire high-performance Nvidia AI chips, making orders worth $5 billion.

The day before, Nvidia revealed an even more powerful AI chip coming next year: the next-generation GH200.

In May, Nvidia announced a new supercomputer, software, and services for generative artificial intelligence (artificial intelligence). Generative AI can generate content, including written articles, from simple descriptive phrases by analyzing and ingesting vast amounts of data. He can also write computer programming code.

Nvidia is a leading manufacturer of artificial intelligence chips. In the fierce battle for the dominance of AI in the technology industry, the advanced chips needed for generative AI, such as ChatGPT chatbots, are essential.

For those looking for great-cap stocks to buy now, here’s a dive into NVDA Stocks.

Nvidia stock technical analysis

Nvidia shares fell 2% on Aug. 11, extending a three-day decline. The leading artificial intelligence firm has trimmed its 50-day/10-week moving averages for the first time since early January, amid a broad market sell-off.

Nvidia stock also reversed below 439.90 buy points from a narrowing three-week pattern that initially cleared on July 13.

A bounce from the major averages could offer a buying opportunity, although the market rally is under pressure while earnings are closing. There’s also the risk of Nvidia breaking significantly below the 50-day line. That may be a signal for long-term owners to sell.

It is also possible that Nvidia will create a new rule.

Market conditions will be a big factor in NVDA’s next move. And again, how the chip maker behaves with AI will have a huge impact on the rally of the struggling market.

NVDA joined the prestigious IBD Leaderboard in February with a huge profit margin. It jumped back in May on huge earnings and strong guidance.

Year-to-date, Nvidia stock is up about 185%, after crashing in 2022. The chip stock hit a 52-week high on July 14.

The RSI line is starting to show some delay after a strong rally, IBD MarketSmith charts show. The rising RS line means that the stock is outperforming the S&P 500. It is the blue line in the shown chart.

NVDA earns money IBD composite classification out of 96, out of the best possible 99. In other words, Nvidia stock is in the top 3% of all stocks in terms of technical and fundamental metrics.

Investors should generally focus on stocks with composite valuations of 90 or even 95 and above. Nvidia stocks often earn a place in the defect 50And Big Cap 20 And sector leaders lists.

the IBD stock check The tool states that NVDA has a relative strength rating of 99. This means that it has outperformed 99% of all other stocks over the past year.

the iShares PHLX Semiconductor Box (SOXX) holds both Nvidia shares and AMD shares.

IBD Live: A new tool for daily analysis of the stock market

Nvidia earnings

nvidia EPS rating He is 68 of 99 and has SMR evaluation It is B, on a scale from worst A to E. The EPS rating compares the company’s earnings growth to other stocks. SMR measures sales growth, profit margins, and return on equity.

On May 24, the chip giant reported a big earnings increase. Nvidia’s earnings report included a bullish AI-powered sales forecast.

The Santa Clara, California-headquartered company earned $1.09 a share on sales of $7.19 billion in the quarter ended April 30. But the results easily exceeded Wall Street’s expectations.

In the first quarter, data center sales increased 14% to $4.28 billion. Game chip sales fell 38% to $2.24 billion.

Analysts expect Nvidia’s earnings per share to rebound 140% in fiscal 2024, based on a sales gain of 62%. Last year, Nvidia’s profits fell 25%.

Its next quarterly report is expected on August 23.

Of the 50 analysts covering NVDA stock, 43 rate it Buy. According to FactSet, six are for title and one is for sale.

Looking for the next big stock market winners? Get started with these three steps

NVDA Backstory, Rivals

Chipset maker fabless created graphics processing units, or GPUs, to make video games more realistic. It’s expanding into artificial intelligence chips used in supercomputers, data centers, and drug development.

Nvidia GPUs act as accelerators for CPUs, or CPUs, made by other companies. They run on “supercomputers” that combine their own CPUs and GPUs.

In addition, Nvidia chips are used in bitcoin mining and self-driving electric cars.

Nvidia made a file A big boost in metaverse apps.

Fabless chips stock included Qualcomm (QCOM), from Broadcom (AVGO) And Harmonious energy systems (MPWR).

Currently, fabless ranks #18 out of 197 industry groups. Fabless companies design devices while outsourcing manufacturing to an outside company.

To get the best returns, investors should focus on Companies that lead the market and their own industrial group.

Would you buy Nvidia stock?

On a fundamental level, Nvidia’s earnings are expected to return to growth. It should more than double this fiscal year, driven by booming chip sales for data centers and artificial intelligence.

The fabless chip company is expanding into other growth areas like automated electric cars and cloud gaming as well. The adoption of the metaverse and cryptocurrency could drive up the demand for Nvidia chips.

However, macroeconomic uncertainties and the risk of a global recession remain.

NVDA stock has made a massive comeback, tripling in 2023 so far. However, stocks are not over bought and have pulled back from key levels. This can create a buying opportunity, or give a sell signal.

Its next move will be a touchstone for the ailing market’s rally.

Bottom line: Nvidia stock is not a buy right now.

As a leading chip company with exposure to the highest end markets, Nvidia is always something to watch.

paying off IBD inventory listings And other IBD contents to find dozens of Best stocks to buy or watch.

You may also like:

Would you buy AMD stock?

See the best stocks to buy and watch

Catch the next winning stocks with MarketSmith

Join IBD Live and learn the best chart reading and trading techniques from the professionals

Leave a Reply

Your email address will not be published. Required fields are marked *