Nvidia Share Forecast January 2022 – Time to Buy NVDA?
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Shares of American multinational technology Nvidia (NASDAQ: NVDA) are in the red today, after closing at $292.90 as of January 4th (19:59 EST). NVDA shares surged by 125% last year, crushing the broader market. Nvidia’s graphics processing units (GPUs) have been and remain in high demand in hot sectors like gaming, data centres, and artificial intelligence.
Nvidia – Technical Analysis
The financial statement of Nvidia indicates that the market cap is at $732.25 billion with total assets worth $40.632 billion. As a result, revenue for 2020 was at $16.68 billion with a profit margin of 25.98% compared to $10.92 billion in 2019.
Moving averages for Nvidia such as Exponential Moving Average (10)(296.76), Simple Moving Average (10)(297.79), Exponential Moving Average (20)(297.42), Simple Moving Average (20)(296.80) and Exponential Moving Average (30)(295.68) are indicating a sell action. Oscillators such as Relative Strength Index (14)(48.28), Stochastic %K (14, 3, 3)(58.84), Commodity Channel Index (20)(−26.87), Average Directional Index (14)(17.39) and Awesome Oscillator(−6.51) are neutral.
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Recent Developments
As mentioned before, Nvidia has applied its graphics capabilities to artificial intelligence, data centres, and other applications in recent years. This makes its chips ideal for supporting the metaverse and its VR-based capabilities in addition to making Nvidia one of the most essential chip stocks in the market. Nvidia announced an expansion of the Nvidia Omniverse in August. As a result, this will serve as a development and simulation platform that serves as a foundation for the metaverse. This will open the metaverse to millions of additional users by enabling reviewers, artists, and designers to work together in real-time across software applications.
Currently, the company holds an impressive 83% market share in the GPU market which means that it will support the overwhelming majority of metaverse experiences. This has boosted the top and bottom lines for the company. This generated $19.3 billion in revenue in the first three quarters of fiscal 2022. This is more than 65% than the same fiscal 2021. The company also raked in more than $6.7 billion in net income during the first nine months of fiscal 2022. Reports indicated that Nvidia’s net income surged by 135% compared with the same period in 2021, despite income tax expenses rising.
Recently, Nvidia had agreed to purchase ARM, a semiconductor and software design company, or $40 billion from SoftBank back in 2020. However, the deal is being examined by regulators. The success of this deal would give Nvidia a significant grasp on every consumer electronic item. This is why regulators are assessing the deal intensely.
Should You Buy NVDA Shares?
Investors interested in NVDA should consider both potential upsides and downsides, especially considering today’s inflation and supply chain challenges. While this can support industries that are continuing to grow, it can have a lagging effect on Nvidia’s own revenue growth. These factors have been taken into account by analysts when preparing revenue estimates for Nvidia. Analysts expect Nvidia to experience 18% revenue growth in fiscal 2022 to $31.5 billion and 16.5% growth in fiscal 2023 to $36.7 billion. If true, these are slowdowns compared to recent yearly gains.
In such a situation, investors will find it difficult to justify the company’s elevated valuation. This could result in a fall in share price. While there is lots to like about Nvidia’s future prospects, investors might want to watch. They should see how things develop rather than investing right now. As there is a possibility that Nvidia will cool off a bit in 2022, now is not the time to buy NVDA shares.
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