What Nvidia’s Charts Say Ahead of This Month’s Earnings Report

Most "Magnificent Seven" stocks have reported fourth-quarter results by now, and most have disappointed – if not on the top and/or bottom lines, then on something like capex, guidance or where they’re headed with either cloud computing or generative AI. Will numbers due later this month from Mag-7 darling Nvidia NVDA serve as the season’s "make-or-break" release?

Let’s check things out:

Nvidia’s Fundamental Analysis

Nvidia expects to publish fiscal fourth-quarter results on Wednesday, Feb. 26, after the bell.

As I write this, Wall Street is projecting that the firm will report $0.85 of adjusted earnings per share on about $38.2 billion of revenue.

That would represent 63% earnings growth and 73% in revenue gains year over year when compared to the $0.52 in adjusted EPS on $22.1 billion of revenue that NVDA saw in the same period last year.

Those would probably be awesome gains for every company on Wall Street that’s not named Nvidia. But for NVDA, such results would represent its slowest pace of earnings and revenue growth since Q1 2023.

Still, many might have anticipated a slowdown in Nvidia’s pace of growth due to the very large numbers now involved.

Meanwhile, some on Wall Street expect NVDA’s earnings report to show that the chip giant is beefing-up projections for capex (capital expenditures). That might not be so hot for the stock’s buyers, but it could be music to existing shareholders’ ears.

Oh, and we'll probably also find out if CEO Jensen Huang has any thoughts regarding to the whole DeepSeek stunner from a couple of weeks back.

NVDA shares fell 18.1% intraday on Jan. 27 after China’s DeepSeek unveiled an AI system that purportedly uses less computing power than American rivals’ do –- potentially bad news for an AI-chip maker like Nvidia.

Meanwhile, Cantor Fitzgerald expressed concerns this week that Mag-7 stocks on the whole appear "vulnerable," and that a shift could be coming as to where funds flow when they go into equities.

"We could see money move out of the [Mag-7] group, with some of the fund flows rotating into other parts of tech and other sectors,” Cantor analysts wrote in a research note.

The firm also sees revenue growth potentially declining across Mag-7 stocks as capital expenditures continue to rise significantly.

Then again, as mentioned above, this could be a positive for Nvidia -- and indeed, Cantor’s report still ranked Nvidia as its top pick among the Mag-7 names.

Nvidia’s Technical Analysis

Now let’s check out NVDA’s charts, beginning with this one going back some 2-1/2 years:

Readers will see that since hitting lows in late 2022, NVDA recently managed to find support at the 23.6% Fibonacci retracement level of the entire rally through late 2024.

This level happened to run into the stock's 200-day Simple Moving Average (or “SMA,” marked with a red line above). So, there was more than one technical reason for the support.

Now let's zoom in to the past six months and see what's happening now:

What we see is a mixed bag.

First, we can see a “double top” pattern of bearish reversal, as marked by the two red boxes above.

That appeared to work at first. Nvidia’s share price broke the downside pivot and lost contact with its 200-day SMA (the red line), only to find help and rally from there.

The stock took back its 21-day Exponential Moving Average (or “EMA,” marked by a green line above).

NVDA this week also retook its 50-day SMA, marked with a blue line at $134.90 in the chart above. That’s the stock’s technical pivot point, and if held, could open the door to higher pricing.

Meanwhile, note that Nvidia's Relative Strength Index (the gray line at the chart’s top) is a little better than neutral in the chart above.

However, the stock’s daily Moving Average Convergence Divergence indicator (or “MACD,” marked with gold and black lines and blue bars at the chart’s bottom) is not all that bullish.

Yes, the histogram of Nvidia’s 9-day EMA (the blue bars above) is above zero. And yes, the 12-day EMA (the black line) is above the 26-day EMA (the gold line).

Those are all typically bullish indicators. However, both of those EMAs are still below zero, which is usually a negative for a stock.

All in, technical analysis tells us that to go higher, Nvidia needs to take and hold its 50-day SMA -- $134.90 in the chart above.

That will often force portfolio managers to increase their long-side exposure. Conversely, a failure to cross and hold the 50-day SMA would historically mean that the double top above meant something significant.

(Moomoo Technologies Inc. Markets Commentator Stephen “Sarge” Guilfoyle owned NVDA stock at the time of writing this column.)

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