Investors will be keeping a close watch on the tech giant Nvidia (NASDAQ: NVDA) in the coming months to see if a high valuation combined with a hawkish Federal Reserve stance might impact the stock’s price.
On February 16, the company will report its fourth-quarter results (for the fiscal year that ended on January 31); in particular, investors will be hoping for a solid showing that will help the stock regain its momentum following a poor start to the year.
As a result of a multitude of factors, including a general sell-off in technology equities as a result of a hawkish Fed, rising inflation, and the failure of the Arm Limited agreement that cost the chipmaker $1.3 billion, Nvidia’s stock has fallen almost 20% so far this year at the time of publication.
All things considered, should investors sell Nvidia stock ahead of its earnings report due to the numerous challenges the company is experiencing right now or is there more to the story than what meets the eye, given the views of leading market analysts.
The next sections provide an in-depth examination of Nvidia’s chart and what it signals for the upcoming weeks, as well as an assessment of Wall Street analysts’ expert analysis as they provide their average price objective for the next 12 months.
NVDA 2022 chart analysis
In the last month, NVDA has been trading in a range between $208.88 – $269.25, its shares are currently changing hands in the middle of this range, so some resistance may be found above. Nvidia is also trading in the center of its 52-week range, which is in line with the S&P 500 Index.
The stock is trading below its 20-day and 50-day simple moving averages (SMAs), which stock investors commonly use to indicate whether the firm is in an uptrend or downtrend. However, the stock is trading 62.58% above its 200-day SMA, which is positive when looking at the NVDA over the long term.
As prices have been stabilizing recently, NVDA presents an interesting setup opportunity. There is a resistance zone slightly above the current price, beginning at $265.95 and going all the way up to $267.06, this zone, formed by a combination of multiple trend lines in the daily time frame
Support, on the other hand, can be located around $235.37, which is a trend line in the weekly time period. At the same time, there is a support zone spanning $224.99 to $228.39 generated by a combination of numerous trend lines in different time periods.
Wall Street’s outlook on Nvidia in 2022
On the basis of Nvidia’s performance over the previous three months, 25 Wall Street trade experts produced 12-month price projections for the firm. With a high estimate of $400 and a low estimate of $250, the stock’s average price target is $355.68, a 46.57% increase over Nvidia’s current price of $242.67.
Based on the price predictions of the 25 TipRanks experts’ stock recommendations for NVDA over the past three months, 23 advocate that investors should “Buy,” while two experts recommend that investors should “Hold,”, interestingly none; advise to “Sell.”
Consequently, the average rating for Nvidia stock is a “Strong Buy,” with a potential upside of 46.57% over the next 12 months.
Can Nvidia hit $350 in 2022?
The company’s value is one of the most important factors that investors should examine when deciding whether to sell their Nvidia stock.
The hardware manufacturer presently trades at 74 times trailing profits, 46 times prospective earnings, and 25 times sales, which is rather pricey when compared to the Nasdaq 100 index, which has a price-to-earnings ratio of 34.
With that being said, NVDA has been a strong performer over the last couple of years, growing more than 230% as a result of the company’s strong rise in profits and sales during that period. With sales likely to reach $7.4 billion, the chipmaker is poised to deliver a strong report to investors.
The firm is also expected to conclude the fiscal year with revenue 60% higher and profits per share that is 74% larger than the previous year, demonstrating that its growth is robust enough to justify the high multiples at which it is now trading.
Video gaming and data center graphics processing unit (GPU) market dominance, in particular, should help the firm maintain its exceptional growth and beat the market’s expectations. With demand for gaming, GPUs is projected to continue expanding in 2022; thus, the rising input costs and a scarcity in the supply chain will result in a rise in the price of GPUs.
In light of the fact that its GPU market share is so dominant and demand in the tech sector is growing, the company is well-positioned to meet the estimated $350 per share by the end of the year.
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