Despite weakness across most of its end markets and industry-wide inventory issues, Nvidia (NASDAQ:NVDA) spiked about 86% year-to-date. The surge in NVDA stock reflects its dominant positioning in the AI (Artificial Intelligence) space, as most of the AI computing infrastructure is with Nvidia. While the popularity of OpenAI’s ChatGPT and ongoing investments in generative AI could support NVDA’s growth, its technical indicators reveal that the rally could cool off.
The chart below shows that NVDA has been in an uptrend this year. Our easy-to-understand and simple technical analysis tool shows that NVDA’s 50-Day EMA (exponential moving average) is 248.80, while its price is $271.19, confirming a bullish trend. However, NVDA’s shorter-duration EMA (10 days) signals that the rally could be cooling off.
Its RSI (Relative Strength Index) increased to 56.66, signaling a Hold near the current levels. Meanwhile, NVDA stock faces immediate resistance at $290, which happens to be its swing high.
What’s the Prediction for NVDA Stock?
Overall, NVDA is a Hold based on our summary signals (which combine the moving averages and the technical indicators to provide a summarized signal).
With top tech giants pouring billions into generative AI and an increased number of firms planning to incorporate these tools, NVDA is poised to deliver stellar financial results.
NVDA stock has received 29 Buy, seven Hold, and one Sell recommendations for a Strong Buy consensus rating on TipRanks. However, due to the recent rally, analysts’ average price target of $286.94 implies a limited upside potential of 5.81%.
Bottom Line
Nvidia stock outperformed the S&P 500 Index (SPX) and the NASDAQ 100 Index (NDX) this year. However, economic uncertainty, pressure on consumer and enterprise spending, and the recent rally imply limited upside potential in NVDA stock in the short term.
