Nvidia (NVDA) is highlighted as the IBD Stock Of The Day as it exhibits a bullish chart pattern in anticipation of its fiscal third-quarter report. The Santa Clara, California-based company is set to unveil its Q3 results on November 21, covering the period ending October 29. Analysts surveyed by FactSet forecast earnings of $3.33 per share on sales totaling $16.06 billion. In the corresponding quarter the previous year, Nvidia earned 58 cents per share with sales amounting to $5.93 billion.
Nvidia has experienced substantial growth in sales and earnings this year, driven by the increasing demand for graphics processors and data-center hardware tailored for artificial intelligence applications.
In a recent client note, investment firm Evercore ISI described Nvidia as “arguably the most important stock in the world right now.” Evercore rates Nvidia as outperform and has set a price target of $600. The firm emphasized Nvidia’s pivotal role as one of the key players among “AI enablers, adopters, and adapters.” Evercore analysts also noted Nvidia’s robust defense of its support line at $400.
Nvidia Stock’s Double-Bottom Base:
On the current stock market, Nvidia stock climbed 1.7% to close at $457.51. The stock has formed a double-bottom base with a buy point of $476.09, according to IBD MarketSmith charts. Encouragingly, Nvidia has surpassed its 50-day moving average.
However, there are several cautionary signals for Nvidia stock. It has encountered resistance at a downward-sloping trendline within the base. Additionally, the stock has experienced a lack of trading volume on up days over the past two months, with several down days marked by higher volume.
Challenges in the AI Market:
Last week, Nvidia stock faced a decline amid concerns that U.S. trade restrictions on China might impact its sales. These restrictions are part of the Biden administration’s efforts to prevent the transfer of artificial intelligence technology to China’s military. Moreover, competitor Advanced Micro Devices (AMD) is aiming to gain a foothold in Nvidia’s AI sales with its MI300 AI accelerators, scheduled for release on December 6.
On a positive note, BofA Securities analyst Vivek Arya reiterated his buy rating on Nvidia stock, setting a price target of $650. Arya expects Nvidia to outperform Wall Street’s expectations with its Q3 results and guidance.
Nvidia stock is featured on three IBD stock lists: IBD 50, Leaderboard, and Tech Leaders.
The anticipation of Nvidia’s Q3 report, combined with its performance in the AI market, makes it a stock to watch as it navigates the evolving landscape of technology and artificial intelligence.
