Nvidia Corporation (NASDAQ: NVDA) continues its impressive performance, marking a seventh consecutive week of gains. The stock surged over 8% this week alone, contributing to a remarkable year-to-date increase of over 59% and an outstanding 279% in the previous 52 weeks. This surge led to a historic moment for Nvidia, as its market cap increased by a staggering $277 billion in a single day, the largest one-day gain ever by any U.S. company.
The company’s stellar earnings report revealed a remarkable 16.4% stock rally, reaching a new all-time high of $785.38. Wall Street seems convinced about Nvidia’s long-term prospects, with analysts emphasizing the company’s vision of doubling its installed data-center infrastructure to $2 trillion over the next five years. This ambitious plan, according to Bernstein analyst Stacy Rasgon, suggests “absolutely mammoth growth potential still to come.”
The focus on data-center business and AI solutions has earned Nvidia praise from analysts, with predictions of significant growth in the industry. TD Cowen’s Matthew Ramsay highlighted the “seemingly insatiable demand for Nvidia-based AI solutions,” projecting a run rate upwards of $80 billion for Nvidia’s data-center business. Nvidia’s data center business, fuelled by AI chip demand, witnessed a phenomenal 409% year-over-year growth, driving the overall revenue to $22.1 billion. The company provided optimistic guidance for the current quarter, suggesting further growth momentum.
Technical Analysis:
On the daily chart, the share price is at an all-time high, trading above the 20-SMA (green line), 50-SMA (blue line), and 100-SMA (orange line) within a well-defined ascending channel, indicating bullish momentum. All three major moving averages are sloping upwards, confirming the strong bullish trend. The Relative Strength Index (RSI) currently sits at 73.68, within healthy bullish territory.
Short-term trading opportunities towards the 23.60% Fibonacci extension level ($814.84), just above Goldman Sachs’ price target of $800.00 (yellow line), should the price action sustain the push higher. A breakout above the immediate resistance of $814.84 (23.60% Fibonacci extension) could trigger further buying pressure towards $847.39 (50.00% Fibonacci extension) and $861.93 (61.80% Fibonacci extension)
However, a retracement could offer short-term trading opportunities towards the initial support at the 23.60% Fibonacci retracement level ($711.99) price level. A break below this level, with significant volume, could expose further support at $666.36 (38.20% Fibonacci retracement) and $629.48 (50.00% Fibonacci retracement).
Summary
Nvidia’s recent performance reflects its dominant position in the booming AI market. The post-earnings surge also underscores its leadership in AI and its potential for continued growth. The technical analysis supports the bullish momentum, with key resistance levels at the 23.60% Fibonacci extension ($814.84) and support at the 23.60% Fibonacci retracement level ($711.99). While short-term pullbacks are possible, the overall trend remains positive.
Sources: TradingView, Trading Economics, Dow Jones Newswire, Nvidia, Seeking Alpha, Goldman Sachs, Reuters, S&P Global.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
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