Technology Stocks

Can NVIDIA Corporation (NASDAQ:NVDA) Shake Off Weakness and Reclaim Key Support into Earnings?

One off the most dramatic of the big-cap tech corrective moves over the past week is surely NVIDIA Corporation (NASDAQ:NVDA) stock’s dive from nearly $290 down to under $240. The stock just broke under the 200-day simple moving average and sentiment has soured fast. But the company is still lining up huge growth and recently announced, along with Volvo Cars, that the Swedish automaker has selected the NVIDIA DRIVE AGX Xavier computer for its next generation of vehicles, with production starting early 2020s.

According to the release, “DRIVE AGX Xavier is a highly integrated AI car computer that enables Volvo to streamline development of self-driving capabilities while reducing total cost of development and support. The initial production release will deliver Level 2+ assisted driving features, going beyond traditional advanced driver assistance systems.”

NVIDIA Corporation (NASDAQ:NVDA) promulgates itself as a firm that operates as a visual computing company worldwide. It operates through two segments, GPU and Tegra Processor.

The GPU segment offers processors, which include GeForce for PC gaming and mainstream PCs; GeForce NOW for cloud-based game-streaming service; Quadro for design professionals working in computer-aided design, video editing, special effects, and other creative applications; Tesla for AI utilizing deep learning, accelerated computing, and general purpose computing; GRID provides power of NVIDIA graphics through the cloud and datacenters; DGX for AI scientists, researchers, and developers; and cryptocurrency-specific graphics processing units.

The Tegra Processor segment provides processors designed to enable branded platforms – DRIVE and SHIELD; DRIVE automotive computers and software stacks, which offer self-driving capabilities; SHIELD devices and services designed for mobile-cloud in home entertainment, AI, and gaming applications; and Jetson TX 2, an AI computing platform for embedded use.

The company’s products are used in gaming, professional visualization, datacenter, and automotive markets. NVIDIA Corporation sells its products to original equipment manufacturers, original device manufacturers, system builders, add-in board manufacturers, retailers/distributors, Internet and cloud service providers, automotive manufacturers and tier-1 automotive suppliers, mapping companies, start-ups, and other ecosystem participants.

NVIDIA Corporation was founded in 1993 and is headquartered in Santa Clara, California.

In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($7.9B against $1.5B).


Shake Off Those Blues

As we discussed earlier, NVDA recently announced, along with Volvo Cars, that the Swedish automaker has selected the NVIDIA DRIVE AGX Xavier computer for its next generation of vehicles, with production starting early 2020s.

Even in light of this news, NVDA has had a rough past week of trading action, with shares sinking something like -11% in that time. That said, chart support is nearby and we may be in the process of constructing a nice setup for some movement back the other way, especially if the broad market indices can start to shake off the corrective feel into earnings season.

“Autopilot done right will bring a jump in safety and driving comfort. Your car will drive you and constantly watch out for you. Making this possible will require sensor architecture, AI software, computing, and safety technology like nothing the world has ever made,” said Jensen Huang, founder and CEO of NVIDIA, who announced the news at his GTC Europe keynote. “As a world leader in safety technology and innovation, Volvo understands there is a direct connection between safety, comfort and the computing capability inside the vehicle.”

NVIDIA Corporation (NASDAQ:NVDA) generated sales of $3.1B, according to information released in the company’s most recent quarterly financial report. For those keeping score, that adds up to a sequential quarter-over-quarter decline of -2.6% on the top line. Shareholders will want to see that trend corrected in mid-November when the company brings new results to the market.

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