NVIDIA Stock Price Forecast Ahead of Earnings: Buy or Sell?

Key Insights

• NVIDIA stock price is stuck in a range ahead of its earnings.
• The company will release its fourth-quarter numbers on February 25.
• Technical analysis suggests that the stock will have a bearish breakout.

NVIDIA stock price has gone nowhere in the past few months. It has remained inside the narrow channel between the support and resistance level at $170 and $193 since November last year. It also remains in a correction after falling from its all-time high of $212. This article explores whether the NVDA share price will rise or fall after its earnings.

NVIDIA to Publish its Earnings on February 25

The NVDA stock price has remained under pressure in the past few months and this may change next week when the company releases its fourth-quarter results. These numbers will provide more information on how the business performed in the fourth quarter and guidance on what management expects this year.

Financial results by some key companies in its ecosystem hint at a strong quarterly release on February 25. For example, the TSMC, its top supplier, released a robust fourth-quarter report. Most recently, it reported a 38% increase in its January revenue.

At the same time, the four biggest NVIDIA clients – Microsoft, Google, Meta Platforms, and Amazon – reported strong capital expenditure numbers. The four companies now predict spending over $650 billion in capital expenditures, with most of those funds flowing to NVIDIA.

In a statement on Tuesday, Meta said that it would expand its relationship with NVIDIA. In addition to using its GPUs, the company will start using the upcoming Grace CPUs, a deal that analysts estimate it is worth tens of billions of dollars.

Analysts Anticipate Strong Revenue and Earnings Growth

Data compiled by Yahoo Finance shows that the average revenue estimate for the fourth quarter is $65 billion, up by 71% YoY. The highest estimate is $68.7 billion, and the smallest one is $62 billion. In most cases, the real NVIDIA revenue figure is usually close or above the upper side.

The average earnings estimate is $1.5, up by over 40% from the fourth quarter of 2024. This EPS will bring the annual figure to $4.68, well above the $2.99 it reported in 2024.

NVDA earnings estimates | Source: Yahoo Finance

While the fourth-quarter’s revenue and earnings numbers are important, the forward guidance is what will likely move the stock. Data shows that analysts anticipate NVIDIA’s first-quarter guidance to be revenue of $70.8 billion and EPS of $1.6. Historically, NVIDIA often delivers a more upbeat estimate than expected.

The other potential driver for the NVIDIA stock will be the management’s guidance on the Chinese business. While China has allowed some companies to buy the H200 chips, the Trump administration is still conducting a review of key companies. On Friday, the administration added Alibaba, a potential client into the entity list, meaning that it may not be allowed to buy these chips.

NVIDIA stock will also react to management’s statement on the ongoing memory chip shortage, which may impact the data center rollout. Such a move will impact its performance over time.

NVIDIA Stock Price Technical Analysis

The daily timeframe chart shows that NVDA stock has traded sideways over the past few months. It has remained within the key support at $170 and $193, even as key indices like the S&P 500 and Nasdaq 100 soared to all-time highs.

The stock is consolidating at the 50-day and 100-day moving averages. Also, the Average True Range (ATR) has continued to fall, a sign that volatility has dropped.

It has also formed a head-and-shoulders pattern, a common bearish reversal sign in technical analysis. Therefore, the most likely scenario is where the NVDA share price drops after earnings.

NVDA stock chart | Source: TradingView

A drop below the head-and-shoulders neckline at $170 will signal more downside to the 50% retracement at $150. On the flip side, a move above the right shoulder at $193 will invalidate the bearish outlook.

The post NVIDIA Stock Price Forecast Ahead of Earnings: Buy or Sell? appeared first on The Market Periodical.