Artificial Intelligence Computing Leadership from NVIDIA: inventor of the GPU, which creates interactive graphics on laptops, workstations, mobile devices, notebooks, PCs, and more.
Nvidia Corporation (NASDAQ: NVDA) has a famous short name as Nvidia, is an American technology company incorporated and based in Santa Clara, California. It spearheads the design of graphics processing units (GPUs) for gaming and professional markets, as well as system on a chip units (SoCs) for the mobile computing and automotive market. The primary GPU product line, labelled “GeForce”, is in direct competitor of Advanced Micro Devices’ (AMD) “Radeon” products. Nvidia expanded its presence in the gaming industry with its handheld Shield Portable, Shield Tablet and Shield Android TV.
Nvidia has shifted to become a platform company focused on four markets – gaming, professional visualization, data centers and auto since 2014. Nvidia has been aggressively investing in artificial intelligence.
In addition to GPU manufacturing, Nvidia provides parallel processing capabilities to researchers and scientists that allow them to efficiently run high-performance applications. They are deployed in supercomputing sites around the world. More recently, it has moved into the mobile computing market, where it produces Tegra mobile processors for smartphones and tablets as well as vehicle navigation and entertainment systems.
The historical weekly chart of Nvdia is very special.
While majority of the stocks were collapsing during the 2000 dotcom bubble, Nvdia did the opposite and propelled upwards. The steep rise of its share price ultimately saw it plunge approx. 65% when price broke the uptrend line. It experienced two sharp and vicious drops, one in Dec 2001 and another in 2007 global financial crisis. It somehow survived with very good products.
In May 2016, the price of Nvdia made a historical breakout above the 2007 peak of 39.6. The break was so clean that it didn’t retrace to test the resistance-turned-support but carry on the ballistic move to hit the top of around 250.
For the last 3.5 months, price has been consolidating in a tight range. Though InvestingHaven’s team is bullish Nvdia long term, we would not be adding new positions as of now because the chance of more consolidation and even downside outweighs the upside potential.
A close up shows that the stock price clearly broke the uptrend line.
The daily chart below suggests that price will test at least the 213.5 – 216.5 zone which happens to be the neckline of a multi-top. This is crucial as a reversal could see price slowly break above 256, which will invalidate our bearishness. Should price fail to support, the next zone is projected to be 181-185, and lastly the worst case scenario 153-157, that is least likely to happen.
In the months to come, if NVDA shows the slowdown we anticipate, it could suggest a rotation into other rising stock segments as mentioned above.
We presented both the bullish as well the bearish scenarios, hence this review contains not a buy nor sell recommendation.