The giant chip-making technology company that makes software and fabless, graphics processing units, application programming interfaces for data science and more, enjoyed a huge surge in its share price after its results were released after the US stock market closed.
Highlights included the following:
Both figures beat market expectations with EPS managing to exceed one dollar again for the first time in three quarters while revenues were up 19% from the preceding three months.
Part of the reason for these positive results was the record revenues from Nvidia’s data centre group, which reported $4.28 billion in sales versus expectations of $3.9 billion, a 14% annual increase.
In addition, the market was heavily focused on artificial intelligence (AI) as the company's next major growth driver and the chip giant more than delivered in its guidance for futures sales.
The company said that it expects revenues of $11 billion (+/-2%) for the next quarter, more than 50% higher than the $7.15 billion that the market was expecting before the release.
In a challenging environment for technology companies, which are suffering from still-high inflation and uncertainty over whether the Fed's rate hikes will end soon, Nvidia expects to make a difference in the following trends.
It seems that investors are truly excited about what the future holds, as Nvidia's stock rose 28% after the market close to new all-time highs.
On a technical level, Nvidia shares have been recovering from a sharp fall after reaching 346 at the beginning of November 2021. From that level the stock price corrected to 108 in October last year, a level not seen since mid-2020.
The chipmaker has recovered strongly after touching that low, rising 158% and closing at 305.31 on Wednesday. The release of its financial results has seen the stock price jump sharply potentially reaching a new high at 382.
If it continues with the current bullish momentum, the next relevant resistance is at 390 and then 400.
The alternative scenario is that after this strong surge, the stock will be oversold which will be reflected in the RSI (>70). This means the stock could correct towards first support located at 367.