Nvidia: New Record High on the Horizon?

NVIDIA (NASDAQ:) shares appear to have slowed in recent weeks.

The stock, which had been at an all-time high, suffered a 25% loss from its peak back in August but has since rebounded thanks to the CEO’s positive outlook.

NVDA’s second-quarter results were impressive, with revenues of $30.04 billion (+15.3%), gross margins of 75.7%, and annual EPS of $0.68 (+11.4%).

This success is largely due to its data center revenues, which reached $26.3 billion due to growing demand for Blackwell architecture. There is no doubt that these gains are the result of NVDA’s ongoing commitment and continuous innovation.

The new Blackwell-class AI Superchips are an innovative combination of 208 billion transistors and a custom TSMC 4NP process.

Each product features two lattice-limited arrays that connect through an incredible 10 terabytes per second (TB/s) chip-chip interconnect into a single unified GPU.

This advanced technology offers extraordinary performance for any application from artificial intelligence to data processing.

This super-chip is a true monster, with competitors light years away from this kind of product.

When deciding to invest in stocks, it is also important to consider future prospects and analyze the stock’s potential.

The outlook for this CEO is very positive, in fact, revenue estimates have been increased by 40 percent, a dream figure for any company.

Personally, I am confident that this stock is not expensive. The outlook for the future is very positive, and there is ample room for the stock to grow. It makes no sense to focus only on the current numbers, but it is important to consider the future ones as well.

Possible dangers on the horizon could be the U.S. elections and possible trade restrictions. The ongoing U.S. presidential election has brought uncertainty about the future of the country’s semiconductor industry, mainly due to trade and export restrictions to the Middle East and China-the latter accounting for 12.1 percent of NVDA’s sales. Depending on the results of the elections to be held by November 2024, we may see further volatility in the industry.

In addition, NVDA’s financial performance is largely dependent on four main customers: the three largest hyperscalers, namely Amazon AWS (NASDAQ:), Google (NASDAQ:) Cloud (NASDAQ:), and Microsoft (NASDAQ:), as well as Meta (NASDAQ:). At present, these customers account for 46 percent of Q2 2024 revenues. Therefore, it is important to constantly monitor the situation, as any problem or reduction in orders from any of these customers could have a significant impact on NVDA’s financial performance.

TECHNICAL ANALYSIS

Nvidia’s stock continues to move ahead in its long-term trend, which remains strongly upward. After a sudden rise that began in late September, it is now going through a consolidation phase before the next rally. We expect the stock to break through short-term resistance set at $122 and continue its upward trend.

This change could lead the stock to break through the all-time highs reached on June 20 and then aim for the psychological threshold of $150 per share.

Any correction before recovery in the $105 area based on long-term bullish dynamics should be considered as an attractive opportunity to enter the market.

In my forecast for the next quarter, I see Nvidia’s stock rising to $150. This is supported by significant and prospective growth over the next few years, coupled with high margins that make it one of the most profitable companies on the stock exchange. We continue to be very optimistic about this company’s business.