Nvidia Share Price Outlook: Earnings Report Could Be Overshadowed by CMA Decision

Summary:

Nvidia's share price comes under the microscope ahead of the August 18 earnings report, as its acquisition of Arm for $40 billion faces scrutiny from CMA.

Intels’ competitor Nvidia’s earnings are due for release on Wednesday, 18 August. Market watchers expect Nvidia’s earnings for the second quarter to come in at $1.02 per share, as against the $0.545 per share the company earned in Q2 2020. The revenue forecast is $6.33 billion, representing a 63.62% increase over the revenue earned in the same period in 2020.

While an earnings beat could boost the Nvidia share price, the markets are also conscious of the upcoming ruling on the company’s $40billion acquisition of Arm, by the UK Competition and Markets Authority (CMA). There are widespread expectations that the CMA could block the deal to prevent a monopoly of the semiconductor market and national security concerns.

Nvidia’s share price is under pressure as of writing, trading 2.83% lower.

Nvidia’s Share Price Outlook

The Nvidia share price outlook shows that price has formed progressively lower highs, which along with the rising wedge, indicate that the uptrend has stalled and the stock is due for a correction. This correction has found support at the 18 June high/11 August low at 193.83. Price needs to break down this level to achieve the measured move at 178.70 (21 June/19 July lows).

On the flip side, the price needs to breach the all-time high at 208.75 (formed on 7 July) to attempt new highs at the 215.67 or 224.39 mark (50% and 61.8% Fibonacci extensions from the swing move of 13 May to 7 July to 19 July). This move could come from a bounce at current support that eventually takes out 208.75, or it could come after the correction to support levels at 178.70 or 171.48.