Nvidia (NVDA) rose above the 50-day moving average Friday and hit an early buy point at 141.90. Does that mean Nvidia stock is a buy now?
The 50 day moving average on a stock chart is a key level that signals whether big fund managers are buying on pullbacks. On its IBD MarketSurge chart, the stock has formed a base with a 146.54 buy point.
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AI Levels Up: Inside The Chips Driving Nvidia Stock
CES Conference On Monday
On Monday, Chief Executive Officer Jensen Huang will deliver the keynote address at CES 2025 at 6:30 p.m. The event can be viewed on Nvidia’s website.
On Tuesday through Friday, Nvidia will showcase its innovations in artificial intelligence, gaming and automotive markets.
Investors also await news about Rubin — the next-generation chip that will follow Blackwell. But rumors are abuzz about its latest graphic processing units that will be displayed at the event, according to TechCrunch.
Meanwhile, Goldman Sachs reported that the AI revolution had moved on to phase 3, from building infrastructure to applications and roll out though software and services.
According to Bank of America analyst Vivek Arya, Nvidia’s software expertise gives it the upper hand vs. rivals that have not been building the software needed for enterprises to use AI chips, instead relying on other vendors. The analyst called Nvidia a “generational opportunity” in October and has a price target of 190.
Nvidia is also well positioned to weather higher interest rates in 2025 than some rivals, according to Kathleen Brooks, research director at brokerage firm XTB, thanks to its high profit margins.
Shares broke out at a buy point of 140.76 in October and reached an all-time high of 152.89. But the stock fell below the 50-day line in December as rival Broadcom (AVGO) challenged its industry dominance. Investors also worried about its Blackwell chip ramp-up and tariffs from the Trump administration that could hurt chip sales.
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Nvidia Stock On Watch After 178% Rally
Investors are in a watching three chart signals:
Funds have not been rushing in to buy the stock. Although the stock’s price performance has beaten 94% of other stocks in Investor’s Business Daily’s database, the Accumulation/Distribution Rating, which measures price and volume action over the last 13 weeks, is D-.
The relative strength line, which compares the stock with the S&P 500 index, fell sharply after the stock hit its all-time high of 152.89 Nov. 21. The relative strength line compares the stock with the S&P 500. The line, plotted in blue in IBD Charts and IBD MarketSurge, is now catching up to the stock’s price action.
Volume is beginning to pick up. Trading volume, is a vital gauge of investor participation, and the lighter volume for Nvidia as it slipped in December showed that the most recent selling has been contained. But on Friday morning, buyers were back, going by the volume that was tracking 22% higher than average.
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Shares gained nearly 4% on Dec. 20 after Morgan Stanley analyst Joseph Moore named Nvidia a “top 2025 pick” but trimmed his price target on the stock to 166 from 168.
The analyst does not expect delays in the Blackwell chip production. Moore said that while a slowdown in the older Hopper chip is expected, that would be welcome news as that will make more high-end memory chips available for its Blackwell line.
The analyst also noted that “based on conversations with customers,” he anticipates the biggest users of application-specific integrated circuits, or ASICs, to shift back to graphic processing units, or GPUs.
While Nvidia’s GPUs can be used for several AI tasks, ASICs that its rivals are focusing on are meant to fulfill a single purpose. Mizuho analyst Jordan Klein noted that while “custom silicon will quickly gain share each year from GPUs, GPUs will be dominant for training purposes.”
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Alphabet | Amazon | Apple | Meta | Microsoft | Nvidia | Tesla
Nvidia Stock: 2024 Highlights
New findings showed that Nvidia was the most bought stock by retail investors in 2024. Retail investors poured nearly $30 billion into the AI stock in 2024, as of Dec. 17, according to Vanda Research. That takes the crown from Tesla (TSLA), which was the retail investor’s most popular stock in 2023. Nvidia is on track for more than twice Tesla’s 86% gain so far this year.
The stock hit a $3 trillion market cap, rivaling Apple (AAPL). Nvidia also replaced Intel (INTC) in the Dow Jones Industrial Average in November. It was the fourth Magnificent Seven stock to join the Dow Jones industrials. The others are Apple (AAPL), Amazon.com (AMZN) and Microsoft (MSFT).
Broadcom Results, Analyst Views On Rival Chips
On Dec. 12, shares fell after Broadcom’s results showed strong demand for its artificial intelligence processors. Broadcom competes with Nvidia in data center AI networking gear and indicated that two large customers were developing their own next-generation AI processors using Broadcom’s chips. Broadcom is also designing an AI chip for Apple (AAPL).
Shares extended losses after news that key customer and Magnificent Seven leader Microsoft (MSFT) is not “chip supply constrained.” In its Securities and Exchange Commission filing earlier this year, Nvidia had disclosed that one customer accounted for 13% of its fiscal first-quarter revenue. UBS analyst Timothy Arcuri believes that customer was Microsoft.
Customer risk may well be Nvidia’s Achilles’ heel and make it vulnerable to fluctuations in demand from its main clients.
Earlier, on Dec. 12, news that the Supreme Court had dismissed Nvidia’s appeal in a securities fraud lawsuit from shareholders was likely what pressured the stock. The 2018 suit was triggered when Nvidia’s revenue took a hit amid a crash in cryptocurrencies and sought to investigate how much of its sales depended on cryptocurrencies.
However, the main driver for Nvidia stock remains sales of its Blackwell chip and how quickly it can ramp up its production.
Taiwan Semi News, Trump Tariff Plans Move Nvidia
On Dec. 10, Taiwan Semiconductor said that sales grew 34% annually in November but declined 12.2% from October. From January to November, sales grew 31.8% compared with the same period in 2023. That likely pressured Nvidia, which fell 2.7%.
Shares also fell 2.6% on Dec. 9 amid news that China’s State Administration for Market Regulation is investigating whether Nvidia has violated its antimonopoly laws.
However, earlier, shares came under pressure after President-elect Donald Trump said he plans big tariffs on goods from China, Mexico and Canada.
But Bernstein Research analyst Stacy Rasgon noted that “raw semiconductor” imports from these countries were tiny and would not hurt Nvidia. The analyst did say the tariff raises some concerns that there may be more broad-based action that could hurt the semiconductor industry and even leaders like Nvidia.
Mizuho analyst Jordan Klein noted that the “restrictions seem in line or less severe than anticipated.” Piper Sandler analysts also stated that there were fewer entities on the restriction list than expected.
In November, analysts at Piper Sandler projected a 20% upside for the stock and raised their price target to 175 from 140. Nvidia is positioned to gain most from the increase in the total AI accelerator market, which Piper Sandler sees at $70 billion in 2025.
Melius Research analysts also raised their price target to 185 from 165 and maintained their buy rating.
Stock Market Leader
For Nvidia, its earnings growth is its strong point.
The AI chip behemoth continues to be a stock market leader and has an ideal Earnings Per Share Rating of 99, while the stock also shows all-around strength with a Composite Rating of 98.
Nvidia stock is on the IBD Leaderboard. The model portfolio has a hedge on that position with the Granite 2x Short NVDA Daily (NVD) exchange traded fund. It is also a top AI stock to watch.
According to FactSet data, Nvidia ranks first among S&P 500 companies for revenue and earnings growth estimates through 2026.
Analysts expect a compound annual growth rate of 5.7% in sales for the S&P 500 with 13.8% in earnings per share over two years. But they see Nvidia’s two-year compound growth reaching 35.5% in sales and 35.1% in earnings per share.
Third-Quarter Results Beat Views
Third-quarter sales came in at $35.08 billion with earnings of 81 cents per share. Analysts polled by FactSet had estimates of 75 cents per share on sales of $33.17 billion. Sales also beat the AI chip leader’s outlook of $32.5 billion for the quarter.
Sales nearly doubled from the prior year, when Nvidia reported $18.1 billion in revenue.
Earlier, chip lithography gear maker ASML (ASML) maintained its 2030 sales target of $46.3 billion at the lower end. ASML makes chipmaking gear. The announcement followed a warning on Oct. 15, when ASML anticipated slower demand in 2025. That sent Nvidia stock nearly 5% lower on the day.
ASML Chief Executive Christophe Fouquet said the company expected that it would be able “to scale (extreme ultraviolet lithography) technology into the next decade” and contribute to the artificial intelligence opportunity.
Analysts at Jefferies Group believed that the slowdown in chip demand appeared to be temporary. ASML’s lithography machines are used by foundries that supply chips to Nvidia.
Nvidia Stock: A Must-Watch
Meanwhile, bullish trends for artificial intelligence make Nvidia a must-watch. In September, consulting firm Bain said the total addressable market for AI hardware and software will grow 40% to 55% annually for at least the next three years.
Demand for Nvidia’s next generation graphics processing unit, the GB200, is expected to reach 3 million in 2026 vs. 1.5 million for its H100 units in 2023.
On Sept. 3, Nvidia fell sharply below the 50-day moving average and saw the largest one-day market cap ever loss in dollar terms for any U.S. company, according to Dow Jones Markets Data.
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IPhone Moment Of AI
Nvidia’s graphics processing units help accelerate computing in data centers and AI applications.
The company was a pioneer in graphics processors used in such industries as health care, automobiles and robotics.
In March 2023, generative AI took a leap forward with OpenAI’s ChatGPT. According to Huang, Nvidia’s AI-capable chips paved the way for the “iPhone moment of AI.”
That helped Nvidia turn the tide on its results. It had reported three quarters of declining year-over-year sales and four quarters of tapering earnings in late 2022 and early 2023.
But then the company achieved record top- and bottom-line growth in the six most recent quarters.
Is Nvidia Stock A Buy?
Looking at chart signals and technical measures can help investors assess whether Nvidia stock is a buy now.
Nvidia has met resistance at the 50-day moving average again. A rebound above the 50-day line in high volume would be helpful.
The relative strength line shows that the stock has not outperformed the S&P 500. It would be wise to wait to see if it improves before buying the stock.
The stock has built a new base with a buy point of 146.54 and has retaken the 50-day line as well as an early entry at 141.90. Nvidia is a buy now for more risk-tolerant investors.
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