Nvidia Shares Near June High as Revenue Jumps 85%

Nvidia shares climbed to their highest point since June 22, roughly 10% above their June low, while chart patterns show the stock forming a falling wedge and trading slightly above the wedge’s upper trendline. The price found support near the 200-day exponential moving average and sits inside the Ichimoku cloud.

The company reported revenue of $81.6 billion for the most recent quarter, an 85% increase from the year-earlier period, driven by higher capital spending from enterprise and cloud customers. Analysts’ average estimate for the quarter was $91.75 billion, a 96.2% year-over-year increase. Analysts project revenue could rise by about 80% in the coming quarter and put full-year revenue near $400 billion. Nvidia has said its CPU business could exceed $20 billion this year.

On valuation metrics, Nvidia’s forward price-to-earnings ratio is near 22, compared with about 21 for the S&P 500 and a five-year Nvidia multiple near 43. A discounted cash-flow estimate values the stock at $220, about 7.7% above the current price. The forward price/earnings-to-growth ratio has fallen to about 0.50 from a five-year average near 1.46.

The company increased its authorized share repurchases by $80 billion in its most recent earnings filing and has reduced shares outstanding modestly, from about 24.3 billion in 2023 to roughly 24.2 billion. Lower relative valuation and strong cash generation have allowed continued buybacks.

Nvidia faces developing competition from some customers and major cloud providers that are building their own accelerators. OpenAI is working on a chip produced with Broadcom, Google is scaling its TPU production, and Microsoft and Amazon are developing internal accelerators. At the same time, some data-center projects have been canceled and New York State has imposed a moratorium on new data-center construction; industry data show roughly $64 billion in planned data-center projects have been canceled.

Technical levels that market participants are watching include Nvidia’s record high of $235; a sustained break above that level would bring $300 into focus as the next resistance area. Near-term performance will reflect hyperscaler spending, Nvidia’s progress in CPUs and data-center products, and the pace at which cloud customers deploy their own silicon.