NVDA Stock Price and Forecast: With Nvidia earnings preview, what can we expect after AMD?

Nvidia shares are trading higher in anticipation of earnings on Wednesday.
NVDA stock is likely also benefitting from a reduction in geo-political tensions.
Nvidia stock seeks to regain bullish momentum despite 2022 struggle

Ivan Brian FXStreet

Nvidia shares were a top performer for holders in 2021, but 2022 has not been as kind so far. This trend is not stock specific as the macroeconomic backdrop has changed dramatically in the space of just a few months. We have gone from predicting three rate rises from the Fed at the start of the year to Fed funds futures now pencilling in up to seven increases and a near certainty of a 50bps rate rise at the March meeting.

We are still unsure the Fed will start so dramatically, but markets have certainly repriced the risker assets accordingly. Geo-political tension between Russia and the West over Ukraine has also added to investors' risk aversion.

Nvidia Stock News

The long mooted deal for British chipmaker Arm is now finally off the table. The news was rumoured for some time but confirmed last week. This saw Nvidia shares post a modest reaction as the rumours had been circulating for some time.

Nvidia has been under pressure though from news of this potential failure as well as the macro environment. Nvidia is down 17% year to date, so investors will be hoping earnings tomorrow can turn things around. Nvidia is expected to post earnings per share of $1.22 on revenue of $7.42 billion. We have to go back to 2018 for the last time Nvidia missed earnings estimates. As this earnings season is showing us, it is guidance and outlook statements that are having the biggest impact on share prices.

Nvidia has to pay SoftBank (Arm's owner) for the proposed acquisition and has already stated it will take a $1.36 billion charge in Q1 2023. Nvidia does get to keep its 20-year license deal with Arm. CitiBank did move to reiterate its buy rating on Nvidia after news of the Arm deal failing was confirmed. The broker said it put a $350 price target on Nvidia.

A strong earnings report from AMD last week did not stop the stock from getting hit heavily on Friday as investors fled from tech and growth and went to safe haven assets.

Nvidia Stock Forecast

The trend here is easily identifiable, and the 200-day moving average beckons at $227. Yearly 2022 lows at $208 would then be next up. Resistance is at $267.

Nvidia (NVDA) chart, daily

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Author

Ivan Brian

FXStreet

Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.

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