Abundant profits are likely to boost Nvidia further

Abundant profits are likely to boost Nvidia further

An EPS of $2.50 pushed the targets of all major analysts higher

nvidia Corp.’s fiscal third-quarter earnings report on Wednesday, August 23rd was significantly better than expected, leading to a large gap by NVDA the next day and a new all-time high for the day around $511. This article summarizes the key data from Nvidia’s earnings report and takes a quick look at the chart to see how the price continues to move.

EPS of $2.50 compared to consensus of $1.80 was a positive surprise of about 40%. This was hinted at by four revised earnings per share estimates in the month prior to release. However, the actual dividend yield remains only 4 cents per share, which makes NVDA very unattractive to cash flow investors.

Instead, Nvidia investors and CFD traders are focusing on the seemingly strong potential for future price gains. The stats are amazing:

  • Nvidia is now the fifth most valuable public company in the world.

  • Nvidia short sellers have lost nearly $10 billion so far in 2023.

  • The company’s valuation is about seven times that of its closest traditional competitor. AMD.

  • The actual PE for 2023 is 192.5.

Ultimately, growth should slow, but over the next few quarters, analysts expect continued strong revenue gains and Nvidia to continue to outperform both the technology sector and the broad market clearly. Although some technology stocks may face challenges from the situation with monetary policy as the Fed is still likely to keep interest rates high for a longer period, this is unlikely to have a strong impact on Nvidia.

On the chart, NVDA price closed the gap within one session of the earnings report, which indicates a possible continuation of the bullish trend. The slow stochastic is not yet in overbought territory, while the ATR has been rising for several weeks and the moving averages continue to give a strong buy signal.

Finding an entry here depends primarily on the expected retention period; Traders looking for a relatively quick move may prefer to wait for the price lower, perhaps even towards the recent support at $405, but be aware that the opportunity may be missed if the price does not reach this low.

Conversely, those who intend to hold their positions for weeks or months and who do not require an entry much lower than the max can consider anywhere under around $500 depending on the reaction to Jerome Powell’s comments in Jackson Hole.

In the current situation of the “AI gold rush”, it is important to keep an eye on the general sentiment as well as the technical analysis and the fundamentals. Confidence in the markets is still very high now in general, but a turn negative if it does occur could develop quickly, so keeping a close eye on any situation remains important. Even this seemingly irrefutable case of buying opportunity is not without risk, while the euphoria after strong earnings can also trigger greed among buyers.

The opinions expressed in this article are personal to the author. They do not reflect those of Exness or FX Empire.

this condition Originally published on FX Empire

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