The Nvidia share price has remained in a tight range as investors predict that the company’s growth will slow this year. The NVDA stock is trading at $220, which is about 25% below the highest point this month and 36% below last year’s high. In addition, other semiconductor stocks like AMD, Taiwan Semiconductor, and Intel have fallen from their highs.
Nvidia is facing a number of headwinds in its business. First, growth in its PC business is expected to slow after the spectacular growth it experienced during the pandemic. However, the slowing PC market is not necessarily bad for the Nvidia stock price because these risks have already been priced in. Indeed, this view was shared by analysts at Bank of America.
Second, Nvidia faces the challenge of its exposure to the cryptocurrency industry. Its chips are some of the most common in the sector. As a result, there are concerns that the company will be hit because of the ongoing cryptocurrency winter. Indeed, many mining companies have slowed their spending on upgrades as they wait for more clarity.
The other big risk for Nvidia is that Intel is investing aggressively in a bid to capture the market. In a note last week, an analyst at Susquehanna said that Intel was making impressive progress in this battle. Still, he believes that the Nvidia share price will rise to $320 in the coming months. One reason for this optimism is that the company is still seeing a strong demand for its data centre products.
In addition to a data center, Nvidia bulls believe that the stock will keep doing well in the coming years because of the giant industries it is serving. While Intel is giving it a competition, it has a strong market share. Further, the recent dip has made the company’s valuation a bit attractive.
The four-hour chart shows that the Nvidia stock price is at an important juncture. The stock is trading at $220, which is slightly above the important resistance level at $207, where it has struggled moving below in the past few weeks. The shares have also moved below the 25-day and 50-day moving averages while the MACD lines are making a crossover.
Therefore, in my view, Nvidia share price is a bit risky right now. As I wrote before, a drop below the support at $207 will signal that there are more sellers in the market. If this happens, it means that sellers will push it below $200.
This post was last modified on %s = human-readable time difference 08:44