Nvidia Stock At A Make-Or-Break Level: Buy, Sell, Or Hold? (Technical Analysis)

Summary:

  • Nvidia Corporation and other big tech stocks have been experiencing measured selling since mid-July, potentially due to a rapid run-up in long-duration treasury yields.
  • However, the selling pressure has picked up this week, with big tech earnings apparently failing to justify the Generative AI hype and a “flight-to-safety” trade into treasury bonds underway.
  • While leading AI stocks like Microsoft, Alphabet/Google, and Meta Platforms have struggled with monetizing Generative AI technology, Nvidia is expected to continue performing well as a picks & shovels provider.
  • On the back of a -20% decline, Nvidia’s long-term risk/reward looks significantly improved under our valuation model, with the stock closing in on fair value and the 5-year expected CAGR return rising to ~20%.
  • That said, Nvidia’s technical setup looks precarious. I continue to rate Nvidia “Hold/Neutral” in the low $400s due to multiple reasons outlined in this article. Read on to learn more.

USA Recession and Crashing Economy Concept

mphillips007

Introduction: “Magnificent 7” Are Coming Back To Earth, And So Is Their Leader, Nvidia

Amid a rising interest rate environment, Nvidia Corporation (NASDAQ:NVDA) and its big tech peers have served as a very profitable hiding spot


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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