Nvidia’s stock price has experienced significant fluctuations despite the company’s Q4 earnings exceeding expectations with strong revenue and earnings per share. The chipmaker’s shares closed at $124.80 in February, up 3.87% from the previous day, but on the weekly chart, they are down almost 9%. This decline is largely due to technical indicators suggesting a sustained correction in the near future.
The 200-day moving average (MA) has also fallen below the current price level for the second time since January 2023, which is considered a bearish signal. However, some analysts, such as Patrick Karim and Shay Boloor, remain bullish on Nvidia’s prospects. They point to the company’s dominance in artificial intelligence (AI) and its potential to drive growth through its Blackwell chips.
Karim warned that Nvidia is close to “implosion mode,” but this suggests a potential buying opportunity if the stock corrects and trades between $90 and $95. Nick Schmidt, co-founder of TraderLion, also shared a bearish outlook, predicting an accelerated drop to around $25. However, he expressed optimism that Nvidia might rebound after the decline.
The company’s strong earnings report, driven by its AI data center business, which now makes up 91% of total sales, has reinforced its bullish outlook. Data center revenue surged to $35.6 billion in Q4, up 93% year-over-year, and the company remains confident in AI-driven demand.
Several Wall Street analysts have shared similar bullish views despite the stock’s lackluster reaction to earnings. Rosenblatt set a street-high price target of $220, implying a 77% upside from current levels, while other firms reiterated their buy ratings. The company’s strong fundamentals and potential for Blackwell chips suggest that Nvidia’s long-term growth projection remains intact.
In conclusion, Nvidia’s stock is facing volatility amid strong fundamentals. While some analysts predict a short-term downside, others see opportunities in the stock’s correction. As the company continues to drive growth through AI, investors will focus on its Blackwell chip rollout and competition from custom AI chips developed by tech giants.
Source: https://finbold.com/nvidia-stock-nears-implosion-mode-what-next-for-nvda