S&P 500   4,967.23
DOW   37,986.40
QQQ   414.65
How major US stock indexes fared Friday, 4/19/2024
Biden signs bill extending a key US surveillance program after divisions nearly forced it to lapse
Closing prices for crude oil, gold and other commodities
MarketBeat Week in Review – 4/15 - 4/19
The drug war devastated Black and other minority communities. Is marijuana legalization helping?
Crews turn sights to removing debris from ship's deck in Baltimore bridge collapse cleanup
A man escaped Sudan's bloody civil war. His mysterious death in Missisippi has sparked suspicion
S&P 500   4,967.23
DOW   37,986.40
QQQ   414.65
How major US stock indexes fared Friday, 4/19/2024
Biden signs bill extending a key US surveillance program after divisions nearly forced it to lapse
Closing prices for crude oil, gold and other commodities
MarketBeat Week in Review – 4/15 - 4/19
The drug war devastated Black and other minority communities. Is marijuana legalization helping?
Crews turn sights to removing debris from ship's deck in Baltimore bridge collapse cleanup
A man escaped Sudan's bloody civil war. His mysterious death in Missisippi has sparked suspicion
S&P 500   4,967.23
DOW   37,986.40
QQQ   414.65
How major US stock indexes fared Friday, 4/19/2024
Biden signs bill extending a key US surveillance program after divisions nearly forced it to lapse
Closing prices for crude oil, gold and other commodities
MarketBeat Week in Review – 4/15 - 4/19
The drug war devastated Black and other minority communities. Is marijuana legalization helping?
Crews turn sights to removing debris from ship's deck in Baltimore bridge collapse cleanup
A man escaped Sudan's bloody civil war. His mysterious death in Missisippi has sparked suspicion
S&P 500   4,967.23
DOW   37,986.40
QQQ   414.65
How major US stock indexes fared Friday, 4/19/2024
Biden signs bill extending a key US surveillance program after divisions nearly forced it to lapse
Closing prices for crude oil, gold and other commodities
MarketBeat Week in Review – 4/15 - 4/19
The drug war devastated Black and other minority communities. Is marijuana legalization helping?
Crews turn sights to removing debris from ship's deck in Baltimore bridge collapse cleanup
A man escaped Sudan's bloody civil war. His mysterious death in Missisippi has sparked suspicion

NVIDIA Is Bottoming But Don’t Buy It Just Yet 

NVIDIA Is Bottoming But Don’t Buy It Just Yet 

Key Points

  • NVIDIA stock may be at a bottom but there is a risk for investors. 
  • The sentiment is still bullish, but price targets are falling and weighing on the action.
  • If Q4 results and outlook are not good enough this stock could set a new low. 
  • 5 stocks we like better than NVIDIA

NVIDIA Corporation NASDAQ: NVDA  is bottoming, but investors are cautioned not to get too bullish too quickly. While the fundamental set-up is consistent with a potential bottom and the technical set-up shows a potential Head & Shoulder Reversal this pattern is far from confirmed. The risk for investors today is that this pattern will turn into a full-blown double bottom and offer a better price before it starts moving higher. 

As it is, the company’s revenue and earnings are in a deep contraction versus last year, weighing on the near-term outlook. If the Q4 results and outlook for F23 are consistent with the market’s outlook that business will improve as we move into the latter portions of F2023, this bottom may hold and even turn into a reversal. If not, NVIDIA will most likely see much lower prices. 

NVIDIA Corporation Expected To See Double-Digit Declines 

Marketbeat.com’s analyst tracking tools show the targets for NVIDIA revenue and earnings are not only expected to decline by high-double-digit figures, but the consensus estimates are trending lower as well. The targets for Q4 have revenue and earnings up sequentially but down 21% and 58% on a YOY basis.

This is largely due to a contraction in the gaming industry as well as macro-headwinds and slowdowns in other key areas, including cloud and cryptocurrency. The good news is the consensus estimates for F2023 are expecting a significant rebound in both figures the question is when will the rebound start and how big will it be? 

Bank of America analysis recently released a report after meeting with company executives. The takeaway is that near-term headwinds persist, but demand for next-generation technology remains high and has the company in a good position for when the economic rebound begins.

As for when that should start, in the case of NVIDIA, Bank of America is expecting that to happen sometime after the fiscal 1st quarter of the year which has not begun yet. What this means for investors is that the upcoming Q4 release on February 22nd and the one after could be disappointing. There is certainly a chance for the outlook to dim or for the rebound to be “kicked down the road” with each report. 


Bank of America reiterated its Buy rating and $215 price target with the report. The rating and the price target are slightly above the consensus ratings of Moderate Buy and $206, which implies about a 45% of upside for the stock. The only bad news is the price target is trending lower, so there is no bottom in sight in that regard. Assuming this trend continues over the next 5 weeks, NVIDIA stock could easily move lower before it forms a firm bottom. 

The Technical Outlook: NVIDIA Is Close To Bottoming But Not Quite There Yet

NVIDIA price action may be at the bottom now, but we would need to see a strong bounce from at or near the current levels to call it a Head & Shoulders Pattern. The technical risks are that weekly and daily price actions, along with the indicators, are consistent with a downtrend that could take the stock back to the recent lows near $125.

In this scenario, the market might form a Double-Bottom, but only if the news is consistent with a brightening outlook. If not, NIVIDIA could fall to a lower low and shave a few more handles off its high 43X price multiple. 

NVIDIA Is Bottoming But Don’t Buy It Just Yet 

Should you invest $1,000 in NVIDIA right now?

Before you consider NVIDIA, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and NVIDIA wasn't on the list.

While NVIDIA currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Investing Strategies To Help Grow Your Retirement Income Cover

Need to stretch out your 401K or Roth IRA plan? Use these time-tested investing strategies to grow the monthly retirement income that your stock portfolio generates.

Get This Free Report

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
NVIDIA (NVDA)
4.8947 of 5 stars
$762.00-10.0%0.02%63.82Moderate Buy$940.30
Compare These Stocks  Add These Stocks to My Watchlist 

Thomas Hughes

About Thomas Hughes

  • tmhughes.writeon@gmail.com

Contributing Author

Technical and Fundamental Analysis

Experience

Thomas Hughes has been a contributing writer for MarketBeat since 2019.

Areas of Expertise

Technical analysis, the S&P 500; retail, consumer, consumer staples, dividends, high-yield, small caps, technology, economic data, oil, cryptocurrencies

Education

Associate of Arts in Culinary Technology

Past Experience

Market watcher, trader and investor for numerous websites. Founded Passive Market Intelligence LLC to provide market research insights. 


Featured Articles and Offers

7 Must-Buy Stocks Under $20

7 Must-Buy Stocks Under $20

In this video, we highlight seven stocks under $20 that are worth a closer look.

Search Headlines: