NVDA gets a boost from Apple and Google

  • Nvidia stock recovers ground this week as tech sector reports.
  • NVDA stock was one of the strongest performers in 2021.
  • NVDA bid from ARM looks like it will fail or Nvidia will pull out.

Nvidia (NVDA) was a favorite stock of both institutional and retail traders in 2021. Global shortages of semiconductor chips fueled by lockdown demand saw chipmakers boom in 2021. Nvidia stock was up over 80% in 2021, but 2022 has not been as kind. NASDAQ and tech stocks have struggled in the face of rising yields and hawkish speak from the Fed. So far in 2022, Nvidia shares are down 24%. From a peak of $346 in late November, the shares hit a low of $209 in January of this year. This week has seen a bit of a respite, and NVDA shares are up 10%.

Nvidia Stock News

While semiconductor shortages were a feature of the news flow for Nvidia last year, this bolstered earnings. Investors were also watching developments around the proposed merger with British chipmaker ARM. Nvidia ran into constant regulatory hurdles in its efforts to push a deal through. The UK cited security concerns and wanted to investigate the deal thoroughly. Now though it seems from media reports that Nvidia is about to give up on the deal.

Bank of America noted last week that this would actually be a positive development for Nvidia. Bank of America explained the deal would result in constant royalty battles and Nvidia could better redeploy the cash elsewhere. Bank of America has a buy rating on NVDA stock.

Meta Platforms (FB) earnings will be closely watched this evening for any read across to Nvidia. Facebook, or Meta Platforms as it is now called, is betting big on the metaverse, and Nvidia also has strong potential and plans in the metaverse area, which it calls the omniverse.

Nvidia Stock Forecast

The sell-off from the late 2021 highs has resulted in a strong downtrend. The latest significant low fell just short of the psychological $200 level and also failed then to create a lower low. This has resulted in the current 10% bounce. NVDA has broken the 9-day moving average, and $267 remains the next resistance target. Failure and the downtrend remains intact, making another test of $200 more likely.

Nvidia (NVDA) chart, daily

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Karen J. Nelson