2024-07-29 13:31:00
• NVIDIA is a major beneficiary of the AI hype
• Analyst sees warning signs and expects a decline
• “Strong Buy” rating for NVIDIA
NVIDIA stock with strong performance
NVIDIA is currently the big beneficiary of the hype surrounding the trend topic of artificial intelligence, and as a result, the stock price of the chip manufacturer has seen significant gains. The NVIDIA stock was able to gain well over 200 percent on the US tech exchange NASDAQ last year and is showing strong performance this year as well. Since the beginning of the year, NVIDIA’s stock has already increased by 129.19 percent to a recent price of 113.58 US dollars (as of July 29, 2024).
Analyst expects decline
Since early July, however, the shares have lost about 8.5 percent in value, and an analyst fears that NVIDIA’s stock may face further losses. According to Markets Insider, he sees several technical warning signs and warns of a decline in the stock.
Javed Mirza, a technical analyst at Raymond James, explained in a client message that NVIDIA has triggered a “mechanical sell signal” based on a moving average convergence divergence (MACD) indicator. Additionally, the price of NVIDIA’s stock has fallen below the 50-day moving average, and the volume shows initial signs of selling pressure. “[…] these three early technical negative signals suggest that a medium-term (1-3 months) correction phase is trying to establish itself,” quotes Markets Insider from the message.
According to Mirza, investors should keep an eye on NVIDIA’s 50-day moving average, which the stock has fallen below. The analyst believes that the shares could potentially drop to 94.94 US dollars if they close below the 50-day moving average for several days, reports TipRanks.
NVIDIA stock: Analysts overall bullish
Overall, however, analysts remain optimistic about the shares of the chip company. At TipRanks, 41 Wall Street analysts have set a 12-month price target for NVIDIA stock in the last three months. 37 of the analysts recommend buying the stock, and four advise holding the shares, while there are no sell ratings. This results in a “Strong Buy” rating for NVIDIA stock.
The average price target among analysts is 142.74 US dollars, which is 26.25 percent above the current price. Opinions, however, vary significantly: The highest price target is at 200 US dollars, implying an increase of about 77 percent, while the lowest price target is at 90 US dollars, which is about 20 percent below the current level.
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More news on the topic
Future Trends in NVIDIA Stock Performance Amid AI Hype
NVIDIA has established itself as a frontrunner in the artificial intelligence (AI) boom, reflected by its remarkable stock surge exceeding 200% over the past year. The recent performance shows a continuation of this trend, with a 129.19% increase since the start of 2024, bringing the stock price to $113.58 as of July 29, 2024. However, with an increasing chorus of caution from analysts, how will NVIDIA navigate potential market shifts?
Analyst Caution Signals
Notably, since early July, NVIDIA’s stock has seen an 8.5% decline, prompting warnings from analysts about potential future losses. Javed Mirza, a technical analyst at Raymond James, points to several negative indications, including a mechanical sell signal from a moving average convergence divergence (MACD) indicator and a price dip below the 50-day moving average. These signals suggest that a short-term correction could be on the horizon, raising concerns for investors.
Continued Analyst Optimism
Despite these warnings, the overall sentiment remains largely optimistic. A total of 41 Wall Street analysts provided a 12-month price target for NVIDIA, with 37 recommending a buy. The consensus middle ground suggests an average target of $142.74, reflecting a potential upside of 26.25% from current levels. This bullish outlook stands in contrast to the mixed views, where the highest target suggests a 77% upside, while the lowest anticipates a decline below current prices.
Potential Market Dynamics
Looking forward, NVIDIA’s trajectory will likely be influenced by broader market dynamics, competitive pressures in the semiconductor sector, and continued advancements in AI. Investors will need to weigh these factors against the current technical signals indicating possible volatility. The fate of NVIDIA’s stock may hinge on its ability to maintain momentum within an increasingly competitive landscape, as well as how effectively it can leverage the ongoing AI revolution.
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