$NVDA EARNING ANALYSIS IN 3min
Summary
TLDRIn this technical analysis video, the presenter examines NVIDIA's stock performance ahead of its earnings release. They highlight the stock's downward trend since November 2021, noting multiple resistance levels and a significant drop in net income by 45% in Q1 2022. The video discusses the company's P/E ratio, comparing it to industry standards, and suggests that NVIDIA's current price might be overvalued at almost 90 times the expected earnings. The presenter also points out technical indicators like the MACD, which is bearish, and key support levels to watch, concluding with a cautious outlook on the stock's potential post-earnings performance.
Takeaways
- 📉 Nvidia's stock has been on a downward trend since November 2021, with falling tops indicating a bearish movement.
- 📊 The stock has faced multiple rejections at the sloping resistance line, the 100-day moving average, and the top resistance level.
- 💼 The 50-day moving average is providing support at around $169-168, which is a key level to watch for potential price action.
- 🔍 There is an internal support level identified at a gap around $157, which could be a significant area of interest if the price drops further.
- 🔢 In the first quarter of 2022, Nvidia reported a net income of $1.6 billion, which is a 45% decrease from the previous quarter's $3 billion.
- 📉 This significant drop in net income raises concerns about the company's financial health and could impact investor sentiment.
- 📈 The company's expected earnings per share (EPS) for the current quarter is $0.49, which, if achieved, would still place the stock at a high valuation compared to other tech giants.
- 📊 A valuation comparison shows Nvidia's price-to-earnings (P/E) ratio at approximately 90 times, which is higher than the 25-35 times range of other major tech companies like Apple, Google, and Microsoft.
- 📉 The Moving Average Convergence Divergence (MACD) indicator is pointing south, suggesting a potential bearish continuation for the stock.
- 🚨 If the upcoming earnings report results in a rejection, the stock price could test the lower support levels, potentially revisiting the bottom established in the recent downtrend.
- 🗓️ The speaker emphasizes the importance of watching the earnings release and the subsequent market reaction, as it could dictate the stock's direction in the short term.
Q & A
What is the current focus of the video script discussion?
-The video script focuses on the technical analysis of NVIDIA's stock performance, particularly in anticipation of its earnings report.
How has NVIDIA's stock trend been since November 2021 according to the script?
-The script indicates that NVIDIA's stock has been slowly grinding down since November 2021, with falling tops and a downward channel being formed.
What is the significance of the 'rejection' mentioned in the script?
-In the context of the script, 'rejection' refers to the stock price failing to break through a resistance level, such as the sloping resistance guard and the 100-day moving average.
What are the support levels mentioned for NVIDIA's stock in the script?
-The script mentions two support levels for NVIDIA's stock: the 50-day moving average support at around $168, and an internal support at around $157.
What was the net income reported by NVIDIA in the first quarter of 2022 compared to the previous year?
-The script reports that NVIDIA's net income for the first quarter of 2022 was $1.6 billion, which is a 45% decrease compared to the $3 billion reported in December 2021.
How does the script analyze NVIDIA's earnings per share (EPS) in comparison to its market price?
-The script calculates the price-to-earnings (P/E) ratio based on NVIDIA's expected EPS of 49 cents, resulting in a P/E of 90 times, which is almost double the market average for major tech companies.
What is the MACD indicator suggesting about NVIDIA's stock trend according to the script?
-The script mentions that the MACD indicator is pointing south, which typically indicates a bearish trend or potential downward movement in the stock price.
What is the potential outcome for NVIDIA's stock if the earnings report is rejected according to the script?
-If the earnings report is rejected, the script suggests that NVIDIA's stock might test the bottom support level, potentially leading to a further decline in price.
What is the comparison of NVIDIA's P/E ratio with other major tech companies mentioned in the script?
-The script compares NVIDIA's P/E ratio of 90 times with other tech companies such as Apple at 35 times, Google at 25 times, and Microsoft at around 30-32 times.
What is the script's final recommendation for viewers regarding NVIDIA's stock?
-The script advises viewers to watch the support levels closely and to be cautious, as the stock appears to be facing significant resistance and potential downward pressure.
Outlines
📉 Nvidia's Stock Performance and Earnings Analysis
This paragraph discusses the technical analysis of Nvidia's stock performance, highlighting a downward trend since November 2021. Key points include the falling tops, a downward channel, and resistance levels that the stock has faced. The analysis also touches on the 100-day and 50-day moving averages, indicating areas of support at $168 and potential internal support at $157 due to a gap. The speaker also reviews Nvidia's earnings, noting a significant drop in net income from the previous year's quarter, which is a cause for concern. The paragraph concludes with a look at the company's expected earnings per share (EPS) and a comparison to its current stock price, suggesting that the market might be overvaluing the stock based on the expected earnings.
Mindmap
Keywords
💡Earnings
💡Technical Analysis
💡Channel
💡Resistance
💡Support
💡Moving Average
💡Net Income
💡EPS (Earnings Per Share)
💡MACD (Moving Average Convergence Divergence)
💡Gap
💡P/E Ratio
Highlights
NVIDIA's stock has been gradually declining since November 2021, with falling tops indicating a bearish trend.
The downward channel created shows a rejection at the sloping resistance guard, indicating further bearish signals.
NVIDIA experienced a 45% net income loss in the first quarter of 2022 compared to December 2021, raising concerns about the company's financial health.
The 100-day moving average (purple line) and top resistance levels are showing rejections, suggesting downward pressure on the stock price.
Support levels at 50-day moving average (around $168) and an internal support at $157 are critical to watch for potential price movements.
The transcript discusses the importance of analyzing past earnings to predict future stock performance, with a focus on net income.
NVIDIA's expected earnings per share (EPS) for the upcoming quarter is $0.49, which, when annualized, results in a high price-to-earnings (P/E) ratio compared to industry standards.
The current P/E ratio of NVIDIA is nearly double that of major tech companies like Apple, Google, and Microsoft, indicating overvaluation.
The Moving Average Convergence Divergence (MACD) indicator is pointing south, suggesting a potential downward trend in stock price.
The presenter emphasizes the need to wait and watch the support and resistance levels for NVIDIA's stock before making investment decisions.
A gap at around $157 is identified as a potential area of support to watch for NVIDIA's stock.
The analysis includes a comparison of NVIDIA's current stock price with its earnings, suggesting that the market may be overvaluing the stock.
The transcript provides a technical analysis approach to evaluating NVIDIA's stock performance pre-earnings announcement.
The presenter warns of the potential risks associated with NVIDIA's stock based on the technical indicators and historical earnings data.
The importance of understanding the relationship between a company's earnings and stock price is highlighted, with NVIDIA as a case study.
The potential impact of NVIDIA's earnings report on the stock price is discussed, with a focus on the importance of support and resistance levels.
Transcripts
are earning on wednesday after hours
so today we're going to take a look at
it
nvidia all right so welcome to top top
cutting edge academy everyone and we
offer all this technical analysis to
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day and it's free join free all right so
what nvidia is doing on earnings let's
take a look at it so if you can see all
the way from november 2021 nvidia is
just like slowly slowly grinding down
you can see here the tops are falling
tops are falling we were a second stops
falling we did not even try that top so
it looks like top is falling right here
we had the rising bottom but look let's
take a look at this downward channel
created and now we got a rejection we
had a
right here so we can take a look at this
rejection the sloping resistance guard
rejection plus we have a hundred day
moving average this purple line hundred
and moving average one rejection then we
have the top resistance also reaching so
there are three rejections right here
that's called tops are falling pretty
much and we have a hundred demo 50-day
moving average support is right
underneath here at 169 168 right there
we have the sloping support right here
which is internal this is for only one
and a half month support
we need to wait and watch and see what
actually happens here but also if you
notice here we have another internal
support
which would be right here
there is a gap here at around 157
to watch but so let's take a look at the
earning okay these are technical look
like with a lot of resistance coming in
and we have support to watch at 50 which
is 160 168
now what is the earning basically so
let's take a look at the previous
earning i want i'm more interested to
see what happened what did they do last
earnings and if i go to quarterly
reports and if i look at the net income
this is the first quarter of 2022 let's
take a look at what what happened net
income i'm only interested in net income
and if you can take a look at it three
billion dollar was the uh 2021 december
earning but the the first quarter of
2002 was 1.6 billion that means they
lost almost
45 percent net income loss net profit
loss is 45 percent how come 45 percent
the big loss guys right here okay this
is more alarming so if you take a look
at that based on analysis what company
earning eps was at that time 1.36 cents
now company is expecting to be 49
they might beat i don't know but if that
even if that these 49 cents the bid this
is what my analysis is let's calculate
49 times four quarter analysis one one
dollar ninety six cents current price is
178
divided by uh
uh 1.96
cents comes out 90 times
basically nvdi is asking right now price
right now price is um as you can see 100
time value not 90 times sorry 90 time is
the value paying how much is apple apple
is 35 time current prices google is 25
times microsoft is 30 32 times something
like so basically every company right
now price is around 25 to 35 times
whereas nvidia is asking based on based
on what they are saying is 49 cents
comes out 90 times almost double the
price they are asking at this point so
okay and as you can see macd is also
pointing south
everything looks badass to me here all
right so this is what the earning looks
like it's up to you how you analyze it
all right but it looks like it's very
stops are falling resistance are also
rejection and the supports need to watch
out 167 once we once we break that then
we might go back to the bottom here if
this earning
got a rejection then we go and test the
bottom this could be right here all
right thank you for tuning in guys see
you monday morning thank you
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