NVIDIA Corporation (NASDAQ: NVDA) accelerates computing to help solve the computational problems. The Company has two segments. The Compute & Networking segment includes its data center accelerated computing platform; networking; automotive artificial intelligence (AI) cockpit, autonomous driving development agreements and autonomous vehicle solutions; electric vehicle computing platforms; Jetson for robotics and other embedded platforms; NVIDIA AI Enterprise and other software; and cryptocurrency mining processors (CMP).

Recent Financial and Business Updates:

• NVIDIA has unveiled its projections for the third quarter of fiscal year 2024, encompassing several key expectations. Foremost among these forecasts is an anticipated revenue of USD 16.00 billion, with a margin fluctuation of plus or minus 2%. Additionally, the company foresees GAAP and non-GAAP gross margins to settle at 71.5% and 72.5%, respectively, with a variance margin of approximately 50 basis points. The estimated figures for GAAP and non-GAAP operating expenses are around USD 2.95 billion and USD 2.00 billion, respectively. Moreover, NVIDIA expects GAAP and non-GAAP other income and expense to reach roughly USD 100 million, factoring out gains and losses from non-affiliated investments. Lastly, GAAP and non-GAAP tax rates are predicted to stand at 14.5%, subject to a margin of plus or minus 1%, while excluding any distinct items.
• In the second quarter of fiscal year 2024, NVIDIA posted remarkable financial results, with a revenue of USD 13.51 billion—an impressive 101% surge compared to the prior year and a substantial 88% increase from the previous quarter. Earnings per diluted share, both on a GAAP and non-GAAP basis, exhibited substantial growth, reaching USD 2.48 and USD 2.70, respectively. This marked an 854% increase from a year ago for GAAP earnings per diluted share and a notable 429% increase for non-GAAP earnings per diluted share.
• Throughout the second quarter, NVIDIA actively returned USD 3.38 billion to shareholders through a combination of share repurchases and cash dividends. As of the conclusion of the second quarter, the company retained USD 3.95 billion within its share repurchase authorization. Furthermore, the Board of Directors authorized an additional USD 25.00 billion for share repurchases, and this authorization does not have an expiration date.
• Notably, NVIDIA is set to distribute its next quarterly cash dividend of USD 0.04 per share on September 28, 2023, to shareholders recorded as of September 7, 2023.
  

Technical Observation (on the daily chart)

The price of NVDA stock has shown a consistent uptrend trend since making 52-week low on October 13, 2022, with an impressive return of 324.07%. The RSI (14 period) momentum indicator is at a value of 48.65, with expectations of some consolidation or a healthy correction before the continuation of the uptrend. Moreover, the price is currently positioned between both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term resistance and support levels respectively.

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As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given to NVIDIA Corporation (NASDAQ: NVDA) at the current price of USD 456.33 as of September 13, 2023, at 07:40 am PDT.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Yellow colour line reflects the 20-period simple moving average (SMA) while the blue line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 20-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Green colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is September 13, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.