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Nvidia Stock Surges after Analyst Upgrade

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Nvidia (NVDA) stock closed 0.5% higher on December 16 and ended the trading day at $225.15. The stock was trading 1.7% below its 52-week high of $228.98 and 80.9% above its 52-week low of $124.46. At its December 16 closing price, Nvidia’s market cap stood at $137.8 billion. On a year-to-date basis, the stock was up about 68.7%.

The stock has risen about 1.13% in today’s trading session as of 12:15 PM ET. It also rose in premarket trading.

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Why did Nvidia stock rise?

Earlier today, Piper Jaffray analyst Harsh Kumar increased the target price on Nvidia stock to $250 from $230. Kumar reaffirmed the “overweight” rating on the stock, according to The Fly.

In a note to clients, the analyst said, “The company guided to sequential growth in the data center business for the January quarter, and management feels hyperscale customers have returned to growth mode.” The report added that Nvidia “seemed extremely comfortable with visibility in its data center segment.”

On December 16, Jefferies also raised its price target for Nvidia stock from $250 to $255 and reaffirmed its “buy” rating.

Analysts’ recommendations and target price

Among the 41 analysts covering Nvidia stock, 29 have “buy” ratings, unchanged from last month. About nine analysts have “hold” ratings on the stock, up from eight last month. Three analysts have “sell” ratings on the stock, unchanged from last month. As of December 16, analysts have given NVDA a 12-month average price target of $234.46. Based on that day’s closing price, this price target represents potential upside of 4.1%.

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Financial performance

In the third quarter of fiscal 2020 (which ended in October), Nvidia’s adjusted EPS fell 3.3% YoY (year-over-year) to $1.78. Its earnings were 13.4% higher than what Wall Street analysts were expecting for the quarter.

In the third quarter, Nvidia reported total revenue of $3.0 billion—higher than analysts’ consensus estimate of $2.9 billion. The company’s fiscal 2020 third-quarter revenue fell 5.2% YoY from $3.2 billion in the third quarter of fiscal 2019.

Technical analysis of Nvidia stock

Nvidia closed 4.6%, 9.4%, and 19.9% above its 20-day, 50-day, and 100-day moving averages of $215.18, $205.87, and $187.81, respectively. The stock’s 14-day RSI (relative strength index) score of 68.2 signified that it was overbought.

Nvidia’s upper, middle, and lower Bollinger Band levels are $225.51, $214.48, and $203.46, respectively. On December 16, it closed near its upper Bollinger Band level, which also signified that it was overbought.

Read Can the Nvidia-Mellanox Acquisition Deal Happen Soon? and Analysts Love Nvidia Stock despite Trade War Fears to learn more.

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