IBD Stock Analysis
- Stock has formed an eight-week flat base with a buy point of 587.76
- Shares jumped above 50-day and 10-week averages, then retreated
- Company benefits from strong chip demand for PCs and data centers
Industry Group Ranking
* Not real-time data. All data shown was captured at
12:56PM EST on
In morning trading on the stock market today, Nvidia stock jumped above its 50-day and 10-week moving average lines, according to IBD MarketSmith charts. But it fell below those levels later in the session.
Nvidia stock held its ground during an overall down day Monday. Shares ended the session up 0.5% to 524.34.
Graphics Processors In Short Supply
The Santa Clara, Calif.-based company is benefiting from strong demand for graphics processors for gaming PCs and data centers. Its processors are used in high-performance computing environments, including artificial intelligence applications.
Graphics processing units, or GPUs, are in short supply as 2021 begins, Wedbush Securities analyst Matt Bryson said in a note to clients Saturday. This situation is positive for Nvidia and rival Advanced Micro Devices (AMD), he says.
“While we would attribute gaming as the primary driver of demand, the sudden increase in cryptocurrency valuations has added another element to GPU consumption that should keep conditions tight and add to any benefit Nvidia is set to realize from its launch of Ampere into the notebook space this quarter,” Bryson said.
Bryson rates Nvidia stock as outperform with a price target of 600.
Nvidia Stock On IBD Watchlists
According to the IBD Stock Checkup tool, Nvidia stock ranks fourth out of 31 stocks in IBD’s fabless chipmaker industry group. It has an IBD Composite Rating of 97 out of 99. IBD’s Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
IBD’s Electronics-Semiconductor Fabless group ranks No. 69 out of 197 industry groups that IBD tracks. Choosing highly rated stocks from leading industry groups in a confirmed stock market uptrend generally increases your chances of making profits in growth stocks.
Nvidia stock has an IBD Relative Strength Rating of 80. That means it has outperformed 80% of stocks in the past 12 months. The best growth stocks typically have RS Ratings of at least 80.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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