Nvidia (NVDA) Shares Fall Despite Strong Earnings
Yesterday, after the close of the main trading session, Nvidia released its second-quarter earnings report:
Earnings per share: actual = $0.67, expected = $0.647;
Revenue: $30.04 billion, expected = $28.737 billion;
The company also announced a $50 billion share buyback.
However, despite the strong results, Nvidias share price declined. While the closing price yesterday was above $125, in pre-market trading today, Nvidia's shares are down below $118.
The more than 6% drop may be due to:
The companys future outlook not meeting investor expectations;
Waning bullish sentiment around AI adoption.
On 12 August, during a technical analysis of NVDAs price chart, we noted:
The price was forming an upward channel (indicated in blue);
The $100 level was acting as support.
Assuming the bearish momentum from the earnings reaction continues, Nvidias shares may open trading today around $115, close to the lower boundary of the current upward channel.
New data provides crucial insights for further predictions:
After retreating from the $130 resistance level, the price is likely to form a broad bearish gap around the $120 level, which could act as a future resistance zone.
The median line of the blue channel may then act as resistance, increasing the likelihood of a bearish breakout below the channels lower boundary.
Meanwhile, analysts remain optimistic. According to a Tipranks survey, 33 out of 36 analysts recommend buying NVDA stock. While the average price target is $150 over the next 12 months, its possible that these estimates could be revised downward if bearish sentiment intensifies.
Read analytical NVDA price forecasts for 2024 and beyond.
Read more: https://fxopen.com/blog/en/oa-nvidia-nvda-shares-fall-despite-strong-earnings/
Text source: Forex Trading Blog