Nvidia Earnings: Despite 8% afterhours bounce, NVDA stock needs to overtake $230 to sustain rally
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CLAIM OFFER- Nvidia released Q4 earnings late Wednesday.
- NVDA stock immediately shot higher on EPS beat.
- Revenue dropped 21% YoY.
- Nvidia stock has risen into a resistance zone between $225 and $230.
Nvidia (NVDA) stock surged 8.4% in Thursday's premarket after the premier US chip designer released fourth quarter earnings that came in ahead of Wall Street expectations. Nvidia revealed adjusted earnings per share (EPS) in the quarter ending in December of $0.88, a solid 10% ahead of analyst consensus. Revenue of $6.05 billion also beat Wall Street's mark by $30 million.
Nvidia stock earnings: Revenues fall 21% YoY
The larger picture makes the positive earnings news a little more suspect. Nvidia's revenue was still down 21% YoY, largely due to the severe decline in gaming revenue seen over the past two quarters. Data center revenue missed expectations in this quarter as well, but the return of Nvidia's gaming segment in Q4 seems to have saved the quarter.
Data center revenue of $3.62 billion fell short of Wall Street's consensus projection of $3.87 billion. Gaming revenue of $1.83 billion came in well above the $1.6 billion expectation. Two smaller segments also showed promise. Robotics & Auto brought in $294 million – ahead of the $267 million expected. Professional Visualization revenue of $226 million outdid the $195 million expected by analysts.
CEO Jensen Huang spoke heavily about Nvidia's promise in the artificial intelligence sphere. Huang bragged about Nvidia's DGX AI supercomputer that now allows customers to use it remotely via browsers, adding that Oracle (ORCL) would soon be joined by Microsoft (MSFT) and Alphabet (GOOGL) as cloud purveyors able to provide their clients with access to the supercomputer.
"NVIDIA AI as a service offers enterprises easy access to the world's most advanced AI platform, while remaining close to the storage, networking, security and cloud services offered by the world's most advanced clouds," Jensen Huang boasted during the earnings call.
Jefferies and Evercore ISI both raised their price targes on NVDA stock to $300, while Bank of America placed its price target at $275.
Nvidia stock forecast
Nvidia stock will likely remain stuck in the resistance zone ranging from $225 to $230. This range worked to push price action lower back in September 2021 and April 2022. NVDA stock has already gained tremendoulsy year to date at 45%, so this supply level should see some profit-taking by bulls. Remember, not everyone is a long-term trader. A break of $230 would have bulls eyeing $260, but I am not certain that is the easiest path at the moment. Bulls should note that the Moving Average Convergence Divergence (MACD) indicator is pointing to an upward path, giving them more evidence that price action remains ready to accelerate.
Failure to break through this thicket will send Nvidia stock back to the $206 to $210 support region or the $190 to $193 zone.
NVDA 4-hour chart
- Nvidia released Q4 earnings late Wednesday.
- NVDA stock immediately shot higher on EPS beat.
- Revenue dropped 21% YoY.
- Nvidia stock has risen into a resistance zone between $225 and $230.
Nvidia (NVDA) stock surged 8.4% in Thursday's premarket after the premier US chip designer released fourth quarter earnings that came in ahead of Wall Street expectations. Nvidia revealed adjusted earnings per share (EPS) in the quarter ending in December of $0.88, a solid 10% ahead of analyst consensus. Revenue of $6.05 billion also beat Wall Street's mark by $30 million.
Nvidia stock earnings: Revenues fall 21% YoY
The larger picture makes the positive earnings news a little more suspect. Nvidia's revenue was still down 21% YoY, largely due to the severe decline in gaming revenue seen over the past two quarters. Data center revenue missed expectations in this quarter as well, but the return of Nvidia's gaming segment in Q4 seems to have saved the quarter.
Data center revenue of $3.62 billion fell short of Wall Street's consensus projection of $3.87 billion. Gaming revenue of $1.83 billion came in well above the $1.6 billion expectation. Two smaller segments also showed promise. Robotics & Auto brought in $294 million – ahead of the $267 million expected. Professional Visualization revenue of $226 million outdid the $195 million expected by analysts.
CEO Jensen Huang spoke heavily about Nvidia's promise in the artificial intelligence sphere. Huang bragged about Nvidia's DGX AI supercomputer that now allows customers to use it remotely via browsers, adding that Oracle (ORCL) would soon be joined by Microsoft (MSFT) and Alphabet (GOOGL) as cloud purveyors able to provide their clients with access to the supercomputer.
"NVIDIA AI as a service offers enterprises easy access to the world's most advanced AI platform, while remaining close to the storage, networking, security and cloud services offered by the world's most advanced clouds," Jensen Huang boasted during the earnings call.
Jefferies and Evercore ISI both raised their price targes on NVDA stock to $300, while Bank of America placed its price target at $275.
Nvidia stock forecast
Nvidia stock will likely remain stuck in the resistance zone ranging from $225 to $230. This range worked to push price action lower back in September 2021 and April 2022. NVDA stock has already gained tremendoulsy year to date at 45%, so this supply level should see some profit-taking by bulls. Remember, not everyone is a long-term trader. A break of $230 would have bulls eyeing $260, but I am not certain that is the easiest path at the moment. Bulls should note that the Moving Average Convergence Divergence (MACD) indicator is pointing to an upward path, giving them more evidence that price action remains ready to accelerate.
Failure to break through this thicket will send Nvidia stock back to the $206 to $210 support region or the $190 to $193 zone.
NVDA 4-hour chart
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