Nvidia (NASDAQ: NVDA) began December 2024 on a weaker note, with its share price slipping below the critical 50-day moving average to trade at $131 as of press time.
While such a drop may raise concerns, analysts point to a significant long-term opportunity, suggesting the current dip could serve as a launchpad for a major rally, projecting NVDA to hit $320 by summer 2025.
As of the market close on December 16, NVDA shares are down 4.3% over the past five days and have shed 5% on the monthly chart, reflecting a period of consolidation that analysts believe could lay the groundwork for a strong rebound in the months ahead.
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Technical analysis points to a bullish setup
Notably, an analysis by TradingShot, a prominent technical analysis firm, highlights NVDA’s consistent two-year Channel Up pattern, which has repeatedly served as a framework for its rallies.
Despite breaking below its 50-day moving average, the stock remains firmly within the Higher Lows trend line of this channel, a zone that has historically marked technical bottoms.
The 200-day moving average (1-Day MA200) provides an additional support level, further reinforcing the possibility of a rebound.
TradingShot’s analysis also points to two recurring phases in NVDA’s price action, the ‘Accumulation Phase’, marked by sideways movement and investor repositioning, and the ‘Bull Phase’, where the stock aggressively rallies within the channel-up structure.
The previous two ‘Bull Phases’, which began in December 2022 and December 2023, saw gains of approximately 257.68%, turning December into a pivotal month for NVDA. Should the stock repeat this pattern, a similar upward move could propel it toward $320 by the summer of 2025.
Essentially, the remarkable symmetry in price action lends credibility to this projection. Each bullish leg has followed a December bottom, with the stock rebounding strongly from its technical support levels. Analysts suggest that the current sideways movement is part of the Accumulation Phase, positioning NVDA for the next surge in its upward trajectory.
Near-term headwinds remain
Despite its bullish long-term setup, NVDA faces notable near-term challenges. The stock has underperformed its peers in the Magnificent Seven, with shares down 11% from their all-time high of $148.88 on November 7.
Meanwhile, tech giants like Tesla (NASDAQ: TSLA), Broadcom (NASDAQ: AVGO), and Microsoft (NASDAQ: MSFT) have outpaced NVIDIA amid broader market optimism.
Adding to the pressure, geopolitical risks linger. Proposed U.S. regulations aim to cap the sale of advanced AI chips in regions like Southeast Asia and the Middle East to restrict China’s access, which could weigh on NVIDIA’s future revenue streams.
Long-term AI dominance and financial strength
However, NVIDIA’s fundamentals remain robust. The company continues to dominate the AI semiconductor market, with key clients such as Amazon (NASDAQ: AMZN) and Microsoft driving demand for its next-generation Blackwell chips.
Furthermore, the consensus among analysts polled by StockAnalysis points to a robust growth trajectory for NVDA. Revenue is expected to surge from $60.92 billion in the fiscal year ending January 2024 to $131.89 billion by January 2025 before crossing the $200 billion mark a year later.
Earnings per share (EPS) is also projected to climb sharply, rising from $1.19 to $3.01 over the next year and further to $4.51 by January 2026, reinforcing NVDA’s strong financial position and profitability.
Conclusion
While NVDA’s near-term price weakness may deter some investors, historical patterns, robust technical support levels, and the company’s dominant role in AI position it for a strong rebound.
For long-term investors, the current dip may present a compelling opportunity to invest in one of the most promising names in tech, with projections pointing to a potential surge to $320 by summer 2025.
Featured image via Shutterstock
