Nvidia Corporation (NASDAQ:NVDA)
With artificial intelligence (AI) as a potential area for growth, Nvidia (NASDAQ:NVDA) is a titan in gaming and data centers. With earnings upcoming, is it a good time to buy Nvidia stock?
Semiconductor News Chipmakers generally face a number of difficulties, including high inflation, weak global growth, the conflict in Ukraine and Russia, and tense U.S.-China relations.
The World Semiconductor Trade Statistics recently forecast a 4.1% decline in chip sales in 2023. Chip sales increased by 26.2% in 2021 and 4.4% in 2022.
Intel (NASDAQ:INTC) issued a warning in January that the slowdown in data centers might last well past 2023. Data centers are extremely important to Nvidia, which will report for Q4 on February 22.
The cutting-edge chips required for “generative AI,” like the ChatGPT chatbot, are essential in the tech sector’s fierce competition for AI supremacy. Some analysts think Nvidia may be in the driver’s seat in the AI arms race.
Nvidia revealed on February 21 that it will cover the most recent developments in generative AI, AI computing systems, and more at its virtual GTC conference from March 20–23.
Stock Technical Analysis for Nvidia
Nvidia stock has increased each week so far in 2023, rebounding significantly from its December 2022 lows.
Nvidia stock reached a buy point of 188 on January 24 from a cup-shaped base. Shares are no longer in the buy range because it has been extended.
Just in time for Q4 earnings reports, shares declined from last Wednesday to last Friday and may have a handle on a consolidation that dates back to March 2022. The 21-day exponential moving average will likely be tested for support even though the NVDA stock has surged far above the 50- and 200-day moving averages.
In 2022, the chip stock fell precipitously, and it is still more than 26% below its 52-week high. But year-to-date, Nvidia stock has increased by more than 46%.
IBD Composite Rating of 84 is awarded to NVDA. In other words, when considering both technical and fundamental metrics together, Nvidia stock has outperformed 84% of all other stocks in IBD’s database.
Nvidia Revenue
On a scale from best to worst, A to E, Nvidia’s EPS Rating is 60 out of 99 and its SMR Rating is a B. The EPS rating contrasts the earnings growth of a company with that of other stocks. Its SMR Rating measures the return on equity, profit margins, and sales growth.
Nvidia’s fiscal third quarter, which ended on October 30, resulted in higher-than-expected sales, but it fell short of Wall Street’s earnings target in November 2022.
The Santa Clara, California-based business earned 58 cents per share, a 50% decrease from the prior year. To $5.93 billion, sales decreased by 17%. It was the second consecutive quarter with declining earnings.
On February 22, Nvidia will release financial results for the most recent quarter. FactSet’s survey of analysts predicts a 39% decline in Nvidia’s quarterly earnings. On essentially flat sales, they forecast that NVDA earnings will decrease by 26% for the entire year.
Analysts anticipate growth in Nvidia’s earnings for the upcoming fiscal year. Investors will be listening for feedback on the demand for artificial intelligence.
28 of the 44 analysts who follow the NVDA stock rate it as a buy. According to FactSet, two have a sell rating and fourteen have a hold rating.
The demand for chips used in computers, video games, and data centers was boosted by the coronavirus pandemic in early 2020. As a result, there was a chip shortage for the majority of the past two years.
According to some industry experts, the chip shortage could now turn into an oversupply issue in 2023.
Nvidia Stock: Should You Buy Or Sell?
Fundamentally, it is anticipated that Nvidia’s earnings and sales will increase in 2023.
The chip manufacturer is growing in high-growth industries like cloud gaming, automated electric vehicles, and data centers. The acceptance of cryptocurrencies and metaverses may boost demand for Nvidia chips.
However, the risk of a global recession and macroeconomic uncertainties are still rising. Sales of semiconductors are predicted to decline this year due to negative factors.
Following a steep decline over the previous year, NVDA stock has so far in 2023 staged a robust comeback. After surpassing a buy point from a cup base in January, the chip stock is now extended.
The stock of Nvidia is not a buy, to sum it up. Nvidia is a company to keep an eye on as a top chip manufacturer with exposure to high-end markets in gaming and data centers.
Featured Image: Pixabay @ WikimediaImages
