NVIDIA (NASDAQ: NVDA) shares have advanced more than 10% in the last thirty days, and the current price stands around $554. The current risk/reward ratio is not good for the long-term investors, and there are certainly better long-term investment opportunities at the moment.
Fundamental analysis: It is not the right moment for investing in shares of NVIDIA
Nvidia Corporation is an American multinational technology company that is the leader in the design of Graphics Processing Units (GPUs). NVIDIA is the second largest semiconductor company globally by market capitalization and one of the largest listed companies on the S&P 500.
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NVIDIA shares have found strong support above $500, but lots of analysts say that the current price appears to be significantly higher than the company’s fundamental value. The company’s outlook remains stable, and it is important to say that NVIDIA reported better than expected Q4 earnings results in February.
Total revenue has increased by 60.8% Y/Y to $5B while Q4 EPS was $2.31 ( above estimates by $0.33). The next fiscal quarter’s revenue is expected to be around $5.30 billion, while GAAP gross margin should be around 64%.
Gaming and Data Center have again hit new records, and the company declared a $0.16/quarterly share dividend, which is in line with previous.
“Q4 was another record quarter, and our Gaming business has reached record revenue of $2.5 billion in Q4, up 10% sequentially, and up 67% from a year earlier. Full-year revenue was also a record at $16.7 billion while a full-year gaming revenue was a record at $7.8 billion, up 41%,” said Colette Kress, Executive Vice President and Chief Financial Officer of NVIDIA.
Still, with the market capitalization of $342B, this company is not undervalued, and maybe it is not the right moment for investing in shares of NVIDIA. NVIDIA shares could advance again above the $600 resistance level this April, but my opinion is that there are certainly better long-term investment opportunities at the moment.
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Technical analysis: $500 represents a powerful support level
Although NVIDIA’s share price has already declined from its all-time high price, it is still expensive at the current market price. The critical support levels are $500 and $400; $600 and $650 represent the important resistance levels.
If the price jumps again above $600, it would be a signal to buy NVIDIA shares, and the next target could be around $620, but if the price falls below the $500 support level, it would be a firm “sell” signal.
Summary
NVIDIA shares have found strong support above $500, but lots of analysts say that the current price appears to be significantly higher than the company’s fundamental value. If the price jumps again above $600, the next target could be around $620, but if the price falls below the $500 support level, it would be a firm “sell” signal.
