NVIDIA Stock Price and Forecast: Is NVDA ready to target $400?

Nvidia stock set another all-time high on Friday as the stock closed up over 4% at $329.85. The move is a continued follow-on from Nvidia's earnings report last week which set the latest rally in motion. Semiconductor stocks have been having a strong year as global shortages mean demand and prices are strong. While the semiconductor sector has outperformed the main benchmarks, Nvidia is in a league of its own this year. The stock is up 153% year to date and nearly 50% in the last month. NVDA stock has seen a huge growth in both gaming revenues and chip revenues but its proposed takeover of UK chip manufacturer ARM is facing regulatory headwinds. However, that is obviously not enough to dent investor enthusiasm with Friday seeing more record highs set. 

NVDA graph, 15 minute

Nvidia stock news

It was really the earnings report on Wednesday that set things in motion for the latest push higher. While revenue growth is slowing it is slowing from very high level and NVDA forecast Q4 revenue to be ahead of analyst estimates. This led to a string of price target changes from virtually all of the major Wall Street banks that cover Nvidia. Certainly, the company is in the sweet spot right now. Rising revenues and margins also remain strong at nearly 67% for gross margin. That is an exceptionally high margin number and sees revenue comfortably trickle down to strong earnings. The only headwind is the potential purchase of ARM. The UK has cited national security concerns and now the US is also going to examine the proposed deal. But with revenue growing between 50 and 60% and a pivot into the omniverse as well as strong gaming and AI revenues, the revenue stream looks strong going forward. Earnings per share were $1.17 versus $1.10 estimated. Revenue was $7.1 billion ahead of the $6.83 billion estimate. Nvidia also forecast Q4 revenue to increase to $7.4 billion at the mid-range. There were strong growth signs with data centre revenue up over 55% YoY. Gaming revenue grew to $3.22 billion, up 42% YoY.

NVDA stock forecast

We were slightly concerned with a potential double top formation after the impressive earnings report but this has been put behind us now with the strong performance on Friday. The short-term supports are at $313.49 and then $305 from the 9-day moving average. The only slight concern is the bearish divergence from the relative strength index (RSI). The record high on Friday is not matched by a new high in the RSI. However, divergences are not as powerful when one high was in overbought or oversold territory as was the case here. Momentum is strong so we feel the trend should continue to be used to your advantage. Breaking $313.49 would be a sign of slowing momentum and a sign to up your defence.