Shares of Nvidia (NVDA), which, along with its AI chip, is one of the world’s most valuable companies, are making news again as it prepares to report earnings for Q1 later this week, May 28. What’s catching people’s eyes is not only hothe w stock has jumped in recent months but also the challenges it may face expanding around the world, especially in China.
Nvidia’s share rose nearly 3 percent to $134.53 in pre-market trading on May 27. The stock did dip slightly to around $131, but in general, the climate is still bullish for the stock. As a leader of the artificial intelligence (AI) chip space, Nvidia has Wall Street excited.
Nvidia shares have risen over 50% since early April. Part of the reason behind the momentum is that AI chip demand is red hot, particularly for use in data centers, cloud computing, and high-tech applications such as generative artificial intelligence and self-driving vehicles.
Technical Indicators Show Bullish Signals
On a technical level, Nvidia’s trade is following a bullish flag continuation pattern. It means that the current price increase may continue, and we could soon see another increase. If Nvidia manages to go above $143 — the level it touched back in February — analysts expect the stock to reach $150.
You’ll find support levels at $121 and $115. Because they line up with past high points and average trends, these levels are considered to be strong. RSI is getting closer to 70, so momentum is strong, although the market is not yet overbought. MACD is also higher than the 0 mark, pointing to ongoing upward strength.
Earnings Expectations Are High
Watchers of Nvidia believe the Q1 report will be important. According to analysts, revenue is expected to be $43.3 billion this quarter, up 66% from the same quarter a year ago. Adjusted earnings are expected to come in at $0.88 per share, which represents a 44% increase from the last comparable quarter.
These figures come from really high demand for Nvidia’s AI GPUs. Nvidia is also likely to announce updates about its new Blackwell chip architecture in the earnings call, providing strong proof of its control in AI.
China Concerns Add Uncertainty
Much as there is a strong demand, Nvidia finds itself in a difficult position. Because the U.S. government limited sales of advanced AI chips to China, the company expects to report a $5.5 billion charge. Compared to last year, Apple has seen revenue from China drop by 4 percentage points, from 17% to 13%.
The company’s short-term results could suffer from this regulatory problem. Nvidia has started partnering with more firms in the Middle East, seeking to fill the gap caused by losing others in the industry.
What’s Next?
If Nvidia reaches or surpasses the forecast and gives positive direction, its stock may climb over $143 and head towards $150 fairly quickly. However, if the results don’t meet expectations or management appears cautious because of global trade challenges, the stock may fall to $121 or $115.
Even so, many people believe in Nvidia’s long-term prospects as a key part of the AI revolution. Nvidia’s success is likely to keep it in the news because of strong technical and fundamental reasons.
