NVIDIA Stock Rose 7% after Hours on Strong Q2 Results

NVIDIA (NVDA) stock rose as much as 7% in the after-hours session today, trading at $159.29 per share. The company announced its Q2 of fiscal 2020 earnings after the market bell today.

In the second quarter of fiscal 2020, NVIDIA’s revenue rose 16.2% sequentially but fell 17.4% year-over-year to $2.58 billion. Its adjusted EPS rose 40.9% sequentially but fell 36.1% YoY to $1.24.

Analysts expected NVIDIA to post revenue of $2.55 billion and adjusted EPS of $1.15 in the second quarter. The company’s better-than-expected results drove its stock price up in after-hours trading.

Growth drivers

NVIDIA’s revenue from its data center segment rose 3.3% sequentially but fell 13.8% YoY to $655 million. Its data center business revenue, however, missed analysts’ consensus estimate of $668.5 million.

The company’s sales from the gaming segment rose 24.5% sequentially but fell 27.3% YoY to $1.31 billion. NVDA’s gaming segment revenue, however, beat analysts’ consensus estimate of $1.30 billion.

In the third quarter of fiscal 2020, NVIDIA expects sales of $2.9 billion, plus or minus 2%. In comparison, analysts expect the company to see sales of $2.97 billion. CNBC reported today, “Nvidia said it estimates gross margin in the fiscal third quarter to be 62.5%, plus or minus 50 basis points; analysts polled by FactSet had been looking for 60.2%.”

How do analysts view NVIDIA stock?

Of the 39 analysts tracking NVIDIA stock, 25 gave it a “buy” recommendation, 11 gave it a “hold” recommendation, and three gave it a “sell” recommendation. Analysts have an average 12-month target price of $182.07 on the stock, indicating a potential upside of 22.4% from its closing price of $148.77 on August 15.

Technical levels

On August 15, NVIDIA stock closed at $148.77, which was 0.87% lower than its previous closing price. This closing price was 49.2% lower than its 52-week high of $292.76 and 19.5% higher than its 52-week low of $124.46. Year-to-date, the stock has risen more than 11%. The company’s market cap is $90.6 billion.

Based on its August 15 closing price, NVIDIA stock was trading 8.8% below its 20-day moving average of $163.17, 6.7% below its 50-day moving average of $159.46, and 10.1% below its 100-day moving average of $165.50. On the upside, the company’s immediate key resistance lies near $151.14, while $146.90 could act as an immediate key support level on a daily basis.

The company’s 14-day RSI (relative strength index) stood at 38, which could be approaching oversold territory. An RSI lower than 30 denotes that a stock could be oversold, while an RSI higher than 70 indicates that a stock could be overbought.