Nvidia Stock Forecast 2023: NVDA Ready to Fly After a Bumpy 2022

Nvidia Stock Forecast 2023: NVDA Ready to Fly After a Bumpy 2022

NVIDIA Stock Forecast 2023: NVDA Stock Forecast for the next 12 Months is $201


Latest NVDA Stock Price

NVDA Stock Performance in 2022

  • Last 1 Month: (+8.4%)
  • Last 6 Months: (-26.7%)
  • YTD: (-57.1%)

Oracle and Nvidia expanding partnership: Oracle and Nvidia are planning to expand their partnership to accelerate enterprise AI and accelerated computing. Oracle is planning to add tens of thousands of Nvidia’s GPUs to its cloud service, including A100 and upcoming H100 chips.

The stock has risen in the past few days by around 9%. A major reason behind this increase is that Meta Platforms is planning to increase its expenditure on data centers and network infrastructure. Nvidia is a stock with huge potential as the data center area is expected to increase in the future. Even though the company’s GPU demand is low, its potential lies in the data center business with increasing demand.

NVIDIA Stock Forecast: Factors That Can Affect Nvidia Stock Price in 2023

Growth Opportunity in Data Centre

Although Nvidia is known for graphics cards and video games, growth is likely to come from data center solutions. Businesses worldwide were already moving data into the cloud before the Covid-19 pandemic, but the pace increased multifold post-pandemic.

And that is where the growth opportunity lies for Nvidia and its high-margin data center solutions. As more and more businesses opt for cloud storage, this industry is not going to get smaller. Plus, while GPU is the main forte for Nvidia, it also specializes in the handling complex workloads like AI. Nvidia is already disrupting Intel’s data center turf by producing data processing units (DPU) that can handle such complex workloads.

In the second quarter, Nvidia experienced data center growth of 61% compared to last year, which will not slow down in the coming months. Hence, the data center will be the pivot point for the growth of Nvidia and its share price in 2023.

Personal Visualization is the next big thing

Nvidia has another fast-growing segment named personal Visualization. It, too, offers double-digit sustainable growth potential in 2023. Personal Visualization will only enable Nvidia to become a key player in Metaverse, and Metaverse represents a multitrillion-dollar opportunity over the long run.

Omniverse is Nvidia’s answer to Metaverse. According to reports, Nvidia will take a $1000 license fee per user to use Omniverse, and there are expected to be around 40 million designers worldwide using Omniverse soon. The Omniverse platform is already available to 3 million developers, which could increase multifold in 2023.

With Omniverse, any software-based bot, like a virtual assistant in a car, can get its virtual avatar. Analysts believe there will be millions of these virtual assistants one day; hence, Omniverse can prove to be a cash cow for Nvidia in 2023 and the coming years.

Datacenter and Omniverse are smaller revenue segments than GPU sales, but these areas have the potential to become the next big thing, and Nvidia is poised to gain from these sectors.

Restriction to sales of data center chips to China and Russia

In a bear market, negative news keeps coming one after the other, holding the market in the tight grip of bears. For Nvidia investors, 2022 was already challenging due to high inflation numbers.

In September, one more bombshell imploded for Nvidia. The US government ordered to an immediate halt of sales of specific chips and data center systems to China capable of handling advanced artificial intelligence (AI) workloads. National and International Security are given prime reasons for this move.

In an SEC filing, Nvidia informed that the US government imposed a new license requirement, which is effective immediately for exporting the company’s A100 and upcoming H100 integrated circuits to China, Hong Kong, and Russia. Also, a license requirement applies to systems Nvidia sells to incorporate these chips, like DGX systems. Moreover, the rules are applicable for any future chips with the same or more excellent capability compared to A100.

The effect of these restrictions on Nvidia’s revenue was evident when the company declared third-quarter guidance during the second-quarter results in 2022. Management said it would lose approximately $400 million in potential sales to China due to this license requirement.

It will be interesting to note the losses due to this turnaround during the third-quarter earnings report. Still, US-China relations are not expected to improve anytime soon, a significant headwind for Nvidia heading into 2023.

It is all about being “expensive”

Nvidia is one of the prominent growth stocks trading at high valuation metrics, and that somewhat explains the sell-off in Nvidia in 2022. Investors are wary of high-growth stocks when Fed continuously increases interest rates, and anticipated recession is glooming over the world.

In 2020, Nvidia was trading at a P/E ratio of 75.32; in 2021, at 59.37, and even after a 58% fall in 2022, it is trading at 39.99. In 2022, it is trading at ten times its sales multiple compared to Nasdaq 100 index trading at just a P/E ratio of 23 and a sales multiple of only 2.8, and all these points to one thing, i.e., Nvidia is overvalued.

The problem is Nvidia does not have results in 2022 to justify rich valuations. In the second quarter (for three months ended July 31), revenue was up just 3% YoY to $6.7billion, and adjusted EPS fell significantly 51% YoY to $0.51 per share. Also, guidance for the third quarter is dismal as revenue projection is only $5.9 billion, hinting at a 17% YoY decline.

Graphics card prices, Nvidia’s forte, have dropped in recent months due to less demand and oversupply. In the second quarter, approximately $5.5 billion worth of graphics cards were sold, down by $3.1 billion compared to Q1. So, recent quarter results do not support a P/E of 39.99; hence, Nvidia is still under a firm grip of bears.

NVIDIA Stock Forecast 2023: Analyst Estimates

NVIDIA Stock Forecast for the next 12 months$201
Citigroup$210
Barclays$200
Susquehanna$180
BMO Capital$210
Mizuho$205

NVIDIA Stock Forecast: Is NVDA a buy for 2023?

The picture looks gloomy for Nvidia and other such high-growth tech stocks. For Nvidia, the requirement of a license for sale in China and Russia acted as the last nail in the coffin. The theory of Nvidia being overvalued got the support of dismal quarter results and guidance. All these negative factors led to a decline of about 60% in Nvidia shares in 2022.

But is it all over for Nvidia? Certainly not. The opportunities in the form of data centers and Metaverse are knocking at doorsteps, and Nvidia is all prepared to welcome them. Even not so good second quarter had 61% growth in the business of data centers. Metaverse is still at the infant stage but has excellent upside potential.

How much of these growth factors will play out in 2023 will be a big question. But it is equally essential that negative factors like interest rate hikes by Fed and bumpy license procedures for supply to China should subside.

It is a buy though one would strongly recommend doing your own research as well.

NVIDIA Stock Forecast Today

Overall OutlookPartially Positive
1. Market's WisdomPartially Positive
1a. Market DataNeutral
1b. Technical RecommendationBuy
2. Crowd's WisdomPartially Positive
2a. Social Media BuzzHigher
2b. Social Media SentimentNeutral

NVIDIA Stock Forecast: Will NVDA stock go up in the near future?

There are two aspects to this whole dilemma of whether the chip manufacturing giant Nvidia will be able to go back to its highs which it once had. One is to look at this technically and the the other is to analyse it fundamentally by looking at what factors are currently affecting the company’s performance and what lies in the future.

Looking at the weekly charts of NVDA, we can observe that this stock has been in a downward parallel channel since September 2021 till now. This now has led to the stock breaking its 200 Moving Average which can be a very bearish signal for the stock technically. The investors can only feel confident to go long after a momentum break of the 200 Moving Average and thereafter the stock going past $190. A risk can also be taken at the break of the trendline which can be a good signal for a change in momentum for NVDA.

Technicals like RSI stand at 55 on the daily charts which means despite of the fact that the stock is still down, it is not in the oversold region yet and hence bearish players can still be interested to short the stock and bring it down to a more reasonable value. Hence, the point if the stock will ever go up still remains under speculation from the technical side unless there is some clear signals backing it up.

Fundamentally, in the midst of continued, intense selling pressure in the top cryptocurrency Bitcoin and the second-largest market cap cryptocurrency Ethereum, Nvidia shares are trading lower. The chipmaker provides well-known GPUs that are designed for cryptocurrency mining, thus fluctuations in the value of cryptocurrencies could affect the market for the company’s goods.

Along with the general stock market, semiconductor stocks declined on Wednesday, driven by falls in Nvidia and Advanced Micro Devices, as Intel introduced a new product aimed at its two rivals in high performance computing.

In midday trade, AMD) plummeted more than 6% to $60 and Nvidia fell 5% to $137. As it announced its new Sapphire Rapids Xeon CPU for high performance computing and its Ponte Vecchio GPU for the data center, Intel saw a 3% decline to $27.50.

Nvidia Stock Forecast 2023: This Growth Stock is Ready to Fly After a Bumpy 2022

Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Stocks or Crypto Coins. Please consult a registered investment advisor to guide you on your financial decisions.

Vineet

Vineet

Vineet Agarwal is a trained technical analyst and avid stock trader. A graduate from a Top Technology Institute, Vineet carries out extensive technical and secondary research for this authored stock forecasts.

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