NVIDIA reports Q2 earnings November 15

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Chip maker NVIDIA (NVDA) will report its third-quarter numbers after the market close November 15. Analysts expect earnings of $1.73, up from $1.33 during the same period last year. The stock is currently up 2.7% on the year.

Technical Analysis

NVDA was recently trading at $204.77 down $87.99 from its 12-month high and $28.76 above its 12-month low. InvestorsObserver’s Stock Score Report gives NVDA a 48 long-term technical score and a 24 short-term technical score. The stock has recent support above $175 and recent resistance below $210. Of the 24 analysts who cover the stock 15 rate it Strong Buy, 3 rate it Buy, 6 rate it Hold, 0 rate it Sell, and 0 rate it Strong Sell, NVDA gets a score of 50 from InvestorsObserver’s Stock Score Report.

Analysts' Thoughts

After an incredibly strong bull run that started in the summer of 2015, chip maker NVDA has finally started to cool off. The stock was at an all-time high as recently as the start of October, but as volatility hit the overall market in October NVDA really took a hit and the stock in now the lower end of 52-week range but remains modestly positive year to date. The recent drop in the stock has lowered NVDA’s valuation, but the forward P/E is still at 26 which is a bit high. The market has been willing to trade the stock at high valuations because of incredibly strong earnings growth, but as its comparables increase growth will slow. The stock is priced for perfection and the market will need to see a very strong quarterly report for that to continue. There is concern over the impact a trade war between the U.S. and China will have on chip demand and prices and any signs of weakness could result in a big drop in the stock. The street is expecting a beat of $0.07 with a whisper number of $1.80 and NVIDIA will need to report earnings close to that mark for the stock to regain the strong upward momentum it enjoyed the first half of the year. Even with the recent selloff analysts remain very bullish and continue to see a lot of upside potential. NVDA is now trading at $204.77 and the 24 analysts who cover the stock have an average price target of $291.54. A strong report will bring a lot of buyers back into the stock, but current shareholders should have an exit strategy in place just in case the numbers disappoint and the stock falls into negative territory for the year.

About NVIDIA Corporation

Nvidia is a leading designer of graphics chips that enhance the experience on computing platforms. The firm's chips are used in a variety of end markets, including high-end PCs for gaming, data centers, and automotive infotainment systems. In recent years, the firm has broadened its focus from traditional PC graphics applications such as gaming to more complex and favorable opportunities, including artificial intelligence and autonomous driving, which leverage the high-performance capabilities of the firm's graphics processing units.

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