Nvidia Stock Forecast: NVDA price flat near all-time high after blowout earnings

NVDA shares were flat after Q1 earnings beat already high expectations.
Hardware giant’s shares already lofty and trading at a 90 P/E after 2021 surge.
Share price is close to all-time high of $645.

Clay Webster FXStreet

Nvidia Corporation (NASDAQ: NVDA), the GPU and graphics giant, could not inspire the premarket on Thursday morning despite delivering consensus-beating Q1 earnings results after the market close on Wednesday, May 26.

Nvidia earnings results

It was yet another defeat for the analysts. Nvidia’s market-leading graphics processing chips used in the gaming, crypto and visualisation fields drove it to beat expectations for EPS, revenue and gross margin. Q1 results delivered revenue of $5.7 billion, up 84% from a year ago. Adjusted EPS more than doubled YoY to $3.66, about 10% above analyst consensus.

Even gross margin, a much-watched figure among chip and semiconductor manufacturers, beat consensus forecasts by 40 basis points to reach 66.2%. Nvidia’s powerful Q1 earnings after the close, however, are only receiving faint praise in Thursday’s premarket. NVDA shares are flat at the time of writing.

Only two barriers appear to be tempering sentiment on the stock. First, NVDA is not cheap. NVDA shares have risen 80% from this time a year ago, while the NASDAQ 100 index has risen 45% in the same period. At the time of writing, the hardware giant’s stock is trading at 90 times trailing twelve month earnings, which makes it a $390 billion company trading well above its mega-cap peers in the FAANG designation. Second, there are some reservations based on the Ethereum cryptocurrency moving to a proof-of-stake infrastructure, wherein Nvidia’s GPUs will be in lower demand by crypto miners.

NVDA technical analysis

NVDA, currently at $628 a share, is trading near its all-time high (ATH) of $648. There are no other barriers in between the ATH and the current price, so traders should expect a retest. The Relative Strength Index (RSI) is at 64 as well, not quite in overbought territory. On the downside, the 20 and 50-day Simple Moving Averages (SMAs) are sitting at $584 and $575, respectively. If shares drop below these SMAs in the next month, there is likely to be support at $542, the low from May 8.

NVDA daily chart

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Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

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