Nvidia Stock Forms A Bullish Chart Pattern Ahead Of Q3 Report

Nvidia (NVDA) stock is the IBD Stock Of The Day as the artificial intelligence chipmaker forms a bullish chart pattern ahead of its fiscal third-quarter report.

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The Santa Clara, Calif.-based company plans to release its results for the quarter ended Oct. 29 after the market close on Nov. 21. Analysts polled by FactSet predict Nvidia will earn $3.33 a share on sales of $16.06 billion. In the year-earlier quarter, Nvidia earned 58 cents a share on sales of $5.93 billion.

Demand for graphics processors and data-center hardware for artificial intelligence applications has been fueling huge sales and earnings growth for Nvidia this year.

In a weekend note to clients, investment firm Evercore ISI called Nvidia “arguably the most important stock in the world right now.”

Nvidia is a key player among “AI enablers, adopters and adapters,” Evercore said. The firm rates Nvidia as outperform with a price target of 600. Evercore analysts noted that Nvidia stock “has made a stalwart defense of its months-long support line at $400.”

Nvidia Stock In Double-Bottom Base

On the stock market today, Nvidia stock rose 1.7% to close at 457.51.

Nvidia stock has formed a double-bottom base with a buy point of 476.09, according to IBD MarketSmith charts. In positive news for shares, Nvidia has risen above its 50-day moving average line.

But there are several caution flags for Nvidia stock. First, it has hit resistance at a downward-sloping trendline in the base. Also, there has been a lack of trading volume on up days in the past two months. Meanwhile, there have been number of down days in higher volume.

Chipmaker Is On Three IBD Stock Lists

Last week, Nvidia stock fell over concerns that U.S. trade restrictions on China would seriously crimp its sales. Restrictions on advanced chip sales to China are part of the Biden administration’s efforts to keep artificial intelligence technology away from China’s military.

Also, rival Advanced Micro Devices (AMD) aims to take a bite out of Nvidia’s AI sales with its MI300 AI accelerators, set to debut on Dec. 6.

On Monday, BofA Securties analyst Vivek Arya reiterated his buy rating on Nvidia stock with a price target of 650.

Arya said he expects Nvidia to beat Wall Street’s targets with its fiscal third-quarter results and guidance.

Nvidia stock is on three IBD stock lists: IBD 50, Leaderboard and Tech Leaders.

Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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