NVIDIA Stock Just Soared to Record High: Does it Have More Upside?a

Key Insights

• NVIDIA stock price jumped to a record high this week.
• The stock formed a bullish flag pattern on the three-day chart.
• The upcoming big-tech earnings are expected to show robust AI spending.

NVIDIA stock price finally made a strong breakout this week after months of consolidation. It jumped to a new record high of $216.6. The technical analysis suggests that the stock has more gains to go in the coming weeks as catalysts align.

NVIDIA Stock is Benefiting From the Ongoing AI Spending

NVDA stock price made a strong bullish breakout this week. It continued an upswing that started earlier this month when it bottomed at $164.

This surge happened as signs continued to show that AI spending continued growing this year. A key sign is the ongoing progress that Anthropic has made, including the Mythos launch.

Mythos is a major upgrade to its model that introduces key features that were unimaginable a few months ago. Indeed, several government agencies, including the Federal Reserve, have met to assess the risk it poses.

More large companies have also committed to continuing their data center build-up. Companies like Microsoft, Google, Meta Platforms, and Amazon have all committed to spending over $650 billion in data centers.

These companies will likely maintain their commitments on Wednesday when most of them publish their earnings. Microsoft, which accounts for 20% of its revenue, will release its results on Wednesday. The other mega companies like Google and Meta will release on the same day.

All these companies are still building their ASIC chips. However, chances are that they will continue using those made by NVIDIA in the foreseeable future. That’s because these chips are well-known for their performance and market share.

Also, NVIDIA owns CUDA, a software that has a strong market share in the industry. It also acquired Groq, a company that some analysts believe was an emerging threat to its market share.

One sign that NVIDIA’s business is thriving is that TSMC, its main supplier, recently published a strong financial report. Its revenue surged by over 30% as the management hailed the strong AI demand.

Wall Street Pros are Bullish on NVIDIA Stock

The recent NVIDIA stock breakout is a validation of what analysts have always believed. Data shows that most analysts have a bullish outlook for the company, with no one having a sell rating.

Top analysts, including those from BTIG. Bernstein, Citigroup, and Benchmark have all boosted the NVDA stock targets this month. As a result, the consensus target is $275, up by 27% from the current level.

Analysts cite the company’s market share and the fact that it is about to launch more products, including new CPUs. Also, the revenue growth this year is expected to be over 70%. That’s an important aspect for a company that has been in the industry for decades.

Most importantly, it is highly undervalued as its forward PE ratio is below 25 despite its strong performance. In contrast, Tesla stock has a PE ratio of 180. NVIDIA stock would be close to $2,000 if it had a similar PE ratio to Tesla.

NVIDIA Stock Price Technical Analysis

The three-day chart shows that the NVIDIA stock price has made a strong bullish breakout in the past few weeks. This rebound happened after it formed a bullish flag pattern, which has a vertical line and a falling channel.

The flag has a height of 60%. Measuring the same distance from the breakout point means that the stock will jump to $330.

Additionally, the stock remains above all moving averages. At the same time, the ADX indicator has jumped to 20, a sign that the rally is accelerating. It also remains above the Supertrend indicator.

The bullish NVDA stock price forecast will become invalid if it drops below the key support at $160.

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