Nvidia stock has stayed in an upward trend this year and is now hovering near its all-time high as several catalysts emerge. It peaked at $243 on Tuesday before paring back some of those gains to trade at $239. Still, a crucial bearish chart pattern is forming ahead of the third-quarter earnings report.
Nvidia stock to benefit from the rising demand and share buyback
There are signs that Nvidia’s demand is soaring. As we wrote earlier, Elon Musk’s SpaceX is in the process of raising $40 billion from Apollo Global to buy its chips.
Other companies in the tech industry are also raising funds to do this. In Australia, Firmus is about to raise over $5 billion in an initial public offering. It plans to use some of these funds to buy Nvidia chips.
Nscale, a British neocloud company, is also in the process of raising $3 billion at a $35 billion valuation. Lambda, a company that Nvidia backs, is also raising funds to scale its data centers.
Most importantly, top hyperscalers plan to continue spending this year. In a recent note, Gartner predicted that AI spending will jump by 50% this year to $2.7 trillion. All this will benefit Nvidia, the biggest GPU provider in the world.
This trend suggests that Nvidia’s revenue growth will likely exceed expectations. Analysts had forecast about 40% revenue growth for 2027, but when the company released its numbers, it guided for growth of about 70%. Nvidia has also historically set conservative guidance, which means its actual results often come in above its own forecasts.
Nvidia’s strong growth explains why the management has accelerated the share buyback plan. It announced a $150 billion buyback last week on top of the continuing $80 billion that it is executing. Data shows that its outstanding shares have dropped to 24.15 billion, down from a 2025 high of 25 billion.
The repurchase is also a sign that the management believes that the company is highly undervalued. It has a forward price-to-earnings ratio of 25, which is much lower than the five-year average of 42.
Still, the risk is that some analysts believe that the AI bubble is about to burst. In a statement this week, billionaire Ray Dalio warned that the burst will be caused by the rising US bond yields.
Analysts remains optimistic about Nvidia shares. BNP Paribas analysts reiterated their outperform rating and a target of $345. Cantor Fitzgerald analysts have a target of $350, while Rosenblatt hiked to $390.
NVDA stock price technical analysis
NVDA stock chart | Source: TradingView
The daily chart shows that Nvidia shares have been in an upward trend this month. It jumped to a high of $243 as the rally gained steam.
The stock has already jumped above the crucial resistance level of $235, its highest swing in May this year. Moving above that level confirmed a bullish breakout. It has remained above the 50-day moving average and the Supertrend indicator.
The risk, however, is that the stock has formed a rising wedge pattern, which is made up of two rising and converging trendlines. This pattern often leads to a bearish breakout, especially when the two lines are nearing their confluence.
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