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NVIDIA is waiting for a reversal

NVIDIA Corporation (NASD: NVDA) is an American technology company, the world’s largest developer of graphics processors and system-on-chip (SoC). NVIDIA’s development has spread to the video game industry, professional visualization, high-performance computing, and the automotive industry, where NVIDIA on-board computers are used as the basis for unmanned vehicles. An important focus for the company is also the market of artificial intelligence (AI).

Life is Feudal
Life is Feudal

The weakening of global economic growth and a number of temporal factors caused the company’s frankly weak results in the past quarter and at the same time not the best forecasts for the current one. Despite this, analysts predict recovery corporations in the second half of 2019.

An important advantage of NVIDIA is a strong balance (the company’s capitalization is $ 97.6 billion) and the ability to generate good cash flows, thanks to which the company allocates significant funds to payments to shareholders. The company is also the absolute leader in the market of video game adapters for PCs, where its processors of the GeForce series account for over 70% of the market.

Growth factors

As already written above, despite the fact that the short-term forecasts still do not look too optimistic, the company is confident that it will be able to solve the problem of excess stocks of chips and restore normal business dynamics in the second half of this year.

The main activity of the company remains the production of graphic systems, for which demand remains at a very high level, in particular, due to the constant development of the market and increasing capacity requirements. In addition, NVIDIA is able to strengthen its position in areas such as artificial intelligence, supercomputing and data centers, as well as expanding the use of NVIDIA chips in the automotive industry.

The main source of income will remain the gaming GPU segment. We note, although NVIDIA’s revenue in this segment showed a significant decline compared to the previous quarter, sales growth here was 11%. In particular, thanks to the release of new video cards of the average price range GeForce GTX 1660 Ti, GTX 1660 and GTX 1650.

The automotive sector also offers excellent prospects for the company. NVIDIA developments in the field of infotainment and navigation systems, and modern driver assistance systems are already being used by the world’s leading automotive concerns, including Audi, Mercedes-Benz, Tesla, BMW, Honda, etc.

Technical analysis

n terms of technical analysis on the daily chart, NVIDIA shares continue to decline and have already dropped to the support level of $ 140 per share. The task of traders and investors in this situation is to wait for the right moment to enter at the most attractive price.

NVIDIA shares
NVIDIA shares

We expect a price reversal in the region of levels 140-113. After the formation of reversal patterns, we recommend to look for an entry point for longterm long. The immediate goal of the upward movement will be the level in the region of $ 177-180, where the line of the 50-day moving average passes.

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