. Nvidia Stock Surges: Earnings Report - Capital Street FX

Nvidia Stock Surges: Earnings Report – Capital Street FX

21 Feb 2024

 Nvidia confronts a significant challenge on Wall Street this week following a ‘parabolic’ surge in its stock

FUNDAMENTAL OVERVIEW:

  • Nvidia is set to announce its fiscal fourth-quarter earnings after Wednesday’s closing bell.
  • This marks the first quarterly report since Nvidia’s market capitalization surpassed that of Alphabet and Amazon.
  • Analysts at Bank of America noted the “parabolic” surge in NVDA’s stock.

As Nvidia reveals its fiscal fourth-quarter earnings at the market’s close on Wednesday, it stands as the world’s third most valuable public company. Investors are affording the company minimal room for error.

Nvidia’s stock has surged by a factor of five since the conclusion of 2022, propelled by soaring demand for its graphics processing units, integral to the artificial intelligence boom. AI developers utilize Nvidia’s chips, including the H100, to craft advanced models like those employed by OpenAI for the development of ChatGPT.

Last week, the company’s market capitalization reached approximately $1.8 trillion, surpassing Alphabet and Amazon, now trailing only behind Microsoft and Apple.

In a report on Thursday, analysts at Bank of America noted that the surge in NVDA’s stock has been exceptionally rapid. Despite this, they maintained their buy rating. They suggested that the movement in NVDA may be interpreted as a combination of fear, greed, and a widespread investor pursuit of all things related to AI.

Analysts anticipate a remarkable 240% surge in revenue compared to the previous year, reaching $20.6 billion for the period ending Jan. 28, as reported by LSEG (formerly known as Refinitiv). The company demonstrates increased profitability for each new dollar of sales it generates.

NVIDIA TECHNICAL ANALYSIS DAILY CHART:

Technical Overview:

Nvidia is trading within a up channel.

Nvidia is positioned below all the Moving Averages (SMA).

The Relative Strength Index (RSI) is in the Selling zone, while the Stochastic oscillator suggests a Negative trend.

Immediate Resistance level: 698.36

Immediate support level: 673.51

HOW TO TRADE NVIDIA

Following a robust upward movement, Nvidia experienced a pause and established a bearish engulfing pattern at a resistance zone, leading to a decline in the stock. Given the substantial ascent, there is a likelihood of correction, suggesting a potential sell-on-rise strategy at present.

TRADE SUGGESTION- LIMIT SELL– 707.67, TAKE PROFIT AT- 659.02, SL AT- 741.83.