NVIDIA stock price has staged a strong comeback and is now hovering near its all-time high of $213. It has jumped in the past five consecutive days, and is hovering at its highest point since November 4. This article explores the top reasons why NVDA may soon have a bullish breakout to $250.
NVIDIA Stock Price Prediction: Technical Analysis
The three-day chart shows that NVDA stock has rebounded over the past few days after spending months in a narrow range.
A closer look shows that the stock has been forming a bullish flag pattern, consisting of a vertical line and a descending channel. It has moved above the upper side of the descending channel.
The stock has jumped above the 50-day and 200-day Exponential Moving Averages (EMA). It has also jumped above the Supertrend indicator, a sign that bulls are in control.
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Also, the Average Directional Index (ADX) has jumped to 20, a sign that the trend is gaining momentum. Therefore, the stock will likely continue rising, with the next key target being the all-time high of $213. A move above that level will signal further gains, potentially to the psychological level at $250.
NVIDIA is Supported by Strong Growth and a Cheap Valuation
In addition to its strong technicals, NVIDIA has a combination of a low valuation and strong growth despite rising challenges, including more companies building their own ASIC chips.
First, data show that the company’s growth is continuing to gain momentum this year. Analysts expect the company’s revenue to come in at $78.5 billion, up by 78% YoY.
NVIDIA’s second-quarter revenue is expected to accelerate in the current quarter, coming in at $86.6 billion, up 85% YoY. The annual revenue is expected to be $370 billion, up by 71.6% YoY.
The company has also become highly undervalued despite its strong revenue growth and market share. Data compiled by Seeking Alpha shows that the forward P/E ratio is 24, slightly higher than the S&P 500 Index’s 20. Its forward PEG ratio fell to 0.64, below the sector median of 1.45.
NVIDIA has also invested in some of the industry’s best companies. For example, it invested in Intel, whose stock has jumped to a record high this month. Also, Lumentum, CoreWeave, and Nebius, which NVIDIA’s stock has invested in, have all jumped in the past few months.
Additionally, Donald Trump is set to visit China in the coming month, a move that may allow the company to sell its products there. Jensen Huang, the CEO, has hinted that the Chinese business would be worth over $50 billion a year.
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