Why Buying Nvidia (NVDA) Stocks in December is a Winning Strategy
Analysis of Nvidia (NVDA) Stock Performance
Nvidia (NASDAQ: NVDA) began December 2024 on a weaker note, with its share price slipping below the critical 50-day moving average, trading at $131 as of press time. While such a drop may raise concerns, analysts point to a significant long-term opportunity. They suggest the current dip could serve as a launchpad for a major rally, projecting NVDA to hit $320 by summer 2025.
Current Market Conditions
- As of December 16, NVDA shares are down 4.3% over the past five days.
- The stock has shed 5% on the monthly chart, reflecting a period of consolidation.
Technical Analysis and Future Projections
Technical analysis by TradingShot reveals NVDA's consistent two-year Channel Up pattern, which has historically marked technical bottoms. Although NVDA has dipped below its 50-day moving average, it remains firmly within the Higher Lows trend line of this channel, suggesting a potential rebound.
Historical Performance
- Recent 'Bull Phases' in December 2022 and December 2023 yielded over 257% gains.
- The current sideways movement indicates an Accumulation Phase, paving the way for upcoming growth.
Near-term Challenges
Despite the bullish outlook, NVDA faces near-term hurdles, including:
- Underperformance against peers in the Magnificent Seven tech stocks.
- Geopolitical risks related to U.S. regulations on AI chip sales.
Long-term Viability
Nvidia's fundamentals remain strong as it continues to dominate the AI semiconductor space, with many analysts forecasting significant revenue growth. Projected earnings per share (EPS) is set to climb sharply from $1.19 to $4.51 by January 2026.
Investment Opportunity Analysis
Although NVDA's near-term weakness may be concerning, its historical patterns and strong role in AI position it for a remarkable rebound. For investors looking at long-term gains, the current dip presents a unique opportunity to invest in this tech leader with expectations of a robust performance ahead.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.