Nvidia (NVDA) is a giant in data centers and gaming, but semiconductor companies are bracing for a bumpy 2023. Is Nvidia stock a buy right now?
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Semiconductor News
Chipmakers broadly face several challenges, from high inflation, weak global growth and the Russia-Ukraine war to increasingly fraught U.S.-China relations.
Recently, World Semiconductor Trade Statistics predicted that chip sales will decline 4.1% in 2023. Chip sales rose 26.2% in 2021 and 4.4% in 2022.
For those looking for top large-cap stocks to buy now, here’s a deep dive into NVDA stock.
Nvidia Stock Technical Analysis
Shares of Nvidia popped 6.4% to 178.39 on Jan. 20, extending a recent rally above the 50- and 200-day moving averages. NVDA stock has surged 20.7% so far in 2023, one of the Nasdaq 100’s top performers.
NVDA stock has formed a cup base within a larger consolidation with a buy point of 188. The chip stock crashed in 2022 and remains more than 38% below its 52-week high. However, Nvidia stock is well off October 2022 lows.
NVDA earns an IBD Composite Rating of 69. In other words, Nvidia stock has outperformed 69% of all other stocks in IBD’s database in terms of combined technical and fundamental metrics.
Investors generally should focus on stocks with Comp Ratings of 90 or even 95 and above. Though it falls short of that threshold now, NVDA can often be found on the IBD Leaderboard, IBD 50, Big Cap 20 and Sector Leaders lists.
The relative strength line for NVDA stock is improving after a plunge in 2022, already right at consolidation highs, a bullish sign.
The RS line indicator rallied strongly from mid-2019 to late 2021, IBD MarketSmith charts show. A rising RS line means that a stock is outperforming the S&P 500 index. It is the blue line in the chart shown.
The IBD Stock Checkup tool shows that Nvidia stock carries a Relative Strength Rating of 81, meaning it has outperformed 81% of all stocks in IBD’s database over the past year.
The iShares PHLX Semiconductor ETF (SOXX) holds both Nvidia and AMD stock.
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