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Is Nvidia Stock a Smart Long-Term Buy?

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Nvidia (NASDAQ:NVDA) stock rose 3.2% on Monday and closed at $322.62 with a market cap of $198.5 billion. The stock rose after Needham analyst Rajvindra Gill increased its target price from $270 to $360 with a “buy” rating. According to a report from TheFly, “Including Mellanox into his model added 95c of incremental earnings per share in fiscal 2022. Gill also upped Nvidia’s gaming estimates to reflect higher Nintendo Switch estimates and data center estimates on the increase in spending by the hyperscalers.” The report also said, “The Mellanox acquisition will be highly accretive, and the stay-at-home economy will drive upside in gaming.”

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Nvidia’s Q1 earnings expectations

Nvidia is scheduled to post its results for the first quarter of fiscal 2021 on May 21 after the market bell. The first quarter ended on April 26. Overall, Wall Street analysts expect Nvidia to report revenues of $2.98 billion in the first quarter—up 34.3% YoY (year-over-year). The semiconductor company will likely report an adjusted EPS of $1.68—up 91% YoY.

Analysts’ recommendations for Nvidia stock

Currently, 40 Wall Street analysts cover Nvidia. Among the analysts, 31 recommend a “buy,” seven recommend a “hold,” and two recommend a “sell.” Analysts’ mean price target on the stock is $308.95, which implies a 4.2% loss from the current level of $322.62. The lowest price target estimate is $140, while the highest is $360.

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Stock returns

Currently, Nvidia stock is trading 0.6% below its 52-week high of $324.50 on Monday. The stock is also trading 143.3% above its 52-week low of $132.60 on June 3, 2019.

Based on the closing price on Monday, Nvidia stock was trading 10.2% above its 20-day moving average of $292.64. The stock is also trading 21.5% above its 50-day moving average of $265.61 and 24.5% above its 100-day moving average of $259.23.

Nvidia’s 14-day relative strength index score is 66. Notably, the score suggests that the stock is approaching the overbought levels. The stock’s upper, middle, and lower Bollinger Band levels are $315.17, $292.64, and $270.12, respectively. On Monday, the stock closed near its upper Bollinger Band level. The level indicates that the stock is overbought.

Currently, Nvidia stock is trading at 42.07x its fiscal 2021 estimated adjusted EPS of $7.67. The stock is also trading at 34.92x its fiscal 2022 estimated adjusted EPS of $9.24. Analysts expect Nvidia’s earnings to grow at a CAGR of 13.7% over the next five years. Also, the company’s sales will likely rise 21.1% YoY in fiscal 2021 and 16.6% in fiscal 2022.

On Monday, Intel (NASDAQ:INTC), Micron Technology (NASDAQ:MU), and Advanced Micro Devices (NYSE:AMD) stocks returned 0.8%, -0.1%, and 4.8%.

Read Nvidia Stock Rose 17.16% after Analyst Upgrade and Is Nvidia Stock a ‘Buy’ amid the Stock Market Crash? to learn more.

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