stock reversed course Wednesday, ending in the green in after starting in the red.
Shares closed up 4.6% at $128.28. The S&P 500 finished 0.5% higher.
The stock has climbed 154% this year. That compares with a 16% rise in the
index and a 20% rise in the
However, shares had hit an intraday peak of more than $140 not long ago.
One technical analyst. Frank Cappelleri, thinks more gains are coming. Cappelleri, founder of the research firm CappThesis, isn’t making a fundamental call. Instead, he’s evaluating charts to get a sense of where any stock can go over the short- and medium-term.
“Nvidia is coming off its fifth eight-week gain of at least 50% since the October 2022 low” said Frank Cappelleri, who is founder of the research firm CappThesis. “After the four prior times, the stock regrouped (like now) and eventually overtook the last high. With the stock’s uptrend still intact, the odds are high that it makes another new high again this time.”
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The potential for a new high is good news for shareholders.
“The rebound in Nvidia today does not denote significant improvement in short-term momentum,” added Katie Stockton, founder of Fairlead Strategies. “We are looking for another 2-3 weeks of consolidation, or sideways digestion, before the uptrend refreshes itself.”
Sideways trading can be a positive too, especially after Nvidia’s run. The chip maker still looks vulnerable to profit-taking and some concerns about restrictions on its exports.
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“We view the current pushback on Nvidia to be centered around true end-market demand for AI GPUs [graphics-processing units], especially with further restrictions on shipments into China…as well as a slowing of the issuance of licenses to AI chip makers shipping to the Middle East,” wrote Mizuho Securities analyst Vijay Rakesh in a research note.
However, Rakesh said Nvidia continues to be a top pick for July, keeping an Outperform rating and $127.50 price target on the stock.
The demand for Nvidia’s chips continues to be strong in China, despite U.S. restrictions on the export of its high-end hardware.
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More than 70 distributors in China are openly advertising online what they claim to be Nvidia’s restricted chips, with supplies amounting to dozens of high-end processors each month and some offering entire servers worth more than $300,000, The Wall Street Journal reported.
The relatively small scale of the flow of chips into China—estimated at around 12,500 annually according to an analysis by the Center for a New American Security—should mean only limited concerns that Nvidia could be subject to tighter restrictions by the U.S. government.
Other tech names had a mixed day.
fell 0.3% and
rose 0.5%. Server maker
rose 1.2%.
Write to Adam Clark at adam.clark@barrons.com and Angela Palumbo at angela.palumbo@dowjones.com
