Nvidia Stock Zooms 3.14% after Analyst Upgrade

Nvidia (NASDAQ:NVDA) stock closed 3.14% higher on January 13 and ended the trading day at $251.98. The stock was trading 0.4% below its 52-week high of $252.99 and 92.4% above its 52-week low of $131.00. At Monday’s closing price, Nvidia’s market cap was $154.2 billion. The stock has risen 69.3% in the last 12 months.

Why did Nvidia stock rise?

On Monday, Needham analyst Ari Shusterman upgraded Nvidia stock to “hold” from “underperform.” According to a report from MarketWatch, “Heading into C1H20, Nvidia is facing easy year-over-year compares, specifically in graphics and data center.” The report also said, “Gaming is showing signs of positive momentum as attach rates for ray tracing games have accelerated. Hyperscalers have also begun to spend again on AI workloads.”

Yesterday, Craig-Hallum had a target price of $300 on Nvidia stock—up from $255 per share. Evercore ISI also increased its target price to $300 per share.

Nvidia reported that data center segment’s revenue was $2.0 billion in the first nine months of fiscal 2020 ended in October. The segment’s revenue was $2.25 billion during the same period in fiscal 2019, which reflected a 10.6% YoY reduction. In the third quarter of fiscal 2020, the company reported that data center segment’s revenue was $726 million—a YoY fall of 8.3% and a sequential rise of 10.8%. In the fourth quarter of fiscal 2020 ending in January, the company expects its data center segment to improve sequentially.

Analysts’ recommendations

As of Monday, 41 analysts covered Nvidia. Among the analysts, 29 recommend a “buy,” ten recommend a “hold,” and two recommend a “sell.” Analysts have given Nvidia a consensus target price of $241.63, which implies a 12-month return potential of -4.1%.

Technical analysis

Currently, Nvidia stock is trading above the overbought zone with a 14-day RSI (relative strength index) score of 76.45. Based on the simple moving average levels, Nvidia stock looks strong. The stock is trading 6.4%, 13.9%, and 25.2% above its 20-day, 50-day, and 100-day moving averages, respectively.

For fiscal 2020 (year ending in January), Nvidia will report an adjusted EPS of $5.57 based on analysts’ consensus estimates. The figure represents a decrease of almost 16.1% compared to fiscal 2019.

Read Can Nvidia Stock Sustain Its Growth Momentum in 2020? and Can the Nvidia-Mellanox Acquisition Deal Happen Soon? to learn more. You can also check out Why Wells Fargo Named Nvidia Stock as a ‘Top Pick.’