Nvidia Stock Forecast: NVDA gains alongside NASDAQ Thursday as focus turns to Arm IPO
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- Nvidia has purchased a chunk of the Arm Holdings IPO.
- The market is advancing early due to excitement over Arm’s first day of trading.
- NVDA moves above $460 in Thursday premarket.
- NVDA stock is having trouble holding onto daily rallies.
Nvidia (NVDA) stock has gained 1.2% in Thursday’s premarket to just above $460 on general excitement over the Arm Holdings (ARM) IPO. NASDAQ futures have added 0.5% at the time of writing.
Nvidia is buying a stake in Arm Holdings alongside a number of tech heavyweights, including Alphabet (GOOGL), Intel (INTC) and Advanced Micro Devices (AMD). The deal was priced on Wednesday and distributed to institutional investors but begins trading on Thursday.
Nvidia stock news: The one that got away
The nearly dozen major tech companies have agreed to purchase about $735 million worth of the $4.87 billion Arm Holdings IPO. Arm, a designer and licenser of specialized computer chips used especially in cell phones, has issued 95.5 million shares at a price of $51 per share. This gives the overall company a market cap of about $54 billion.
The reason the market is excited about Arm’s IPO is that the IPO market has been rather tepid over the past 18 months following the covid boom. So much so that Arm Holdings’ offering was oversubscribed by about 10 times, according to Bloomberg. Investment banks initially thought they needed two days to sell all the shares but instead finished handing them out on the first day.
The Arm IPO is significant for Nvidia CEO Jensen Huang, because it is the one that got away. Nvidia announced its intention to buy Arm from its majority owner, Japan’s Softbank, exactly three year ago to the month for $40 billion. Eventually, Jensen gave up in 2022 as it appeared that regulators in multiple countries were not accepting of the move. Many competitors were worried that it would give Nvidia insurmountable power in the advanced semiconductor realm.
Arm’s revenue and earnings have stagnated over the past year, but its estimated market share has risen from 42% to 49% since the start of 2021.
Bank of America Securities AI Conference hosted Nvidia’s General Manager and Vice President of Accelerated Computing, Ian Buck, on Monday. When peppered with questions from Bank of America analyst Vivek Arya about the heavy costs associated with large language models (LLMs), Buck responded that the problem was already easing.
“One thing that is – NVIDIA is spending and investing billions in R&D to optimize for generative AI for training and inference scale,” Buck said. “And with every generation of our GPU, with every generation of our interconnect and InfiniBand and CX networking technology, with every innovation of NVLink, those things [...] increase performance dramatically and also bring down the cost of training.”
Nvidia stock forecast
Nvidia stock is trading below both the 9-day and 21-day Simple Moving Averages (SMA), which gives it the profile of a downtrend rotation. Any major sell-off should push shares back to the $420 or $400 level at which the stock has discovered support on a number of occasions.
The Moving Average Convergence Divergence (MACD) indicator has rolled over in bearish fashion and could foreshadow further downward pressure. To change the forecast, bulls need to push NVDA stock above the 9-day SMA at $467.58.
NVDA daily chart
The weekly chart below still shows plenty of room on the upside if you follow the long-term top trendline going back to 2020. The Fibonacci Extension indicator coincides with that idea in that NVDA could run up to $620 at some point in the medium term at the 161.8% Fibo level.
NVDA weekly chart
