Nvidia Stock Price Rare Pattern Points to a Surge After Earnings

Nvidia stock price is bracing for volatility as investors wait for its second-quarter earnings results, which will come out after the market closes on Wednesday. It has formed a bullish flag pattern, pointing to more gains, potentially $200 after the earnings report.

Nvidia Stock Price Technical Analysis Identifies a Bullish Chart Pattern

The daily timeframe chart shows that the Nvidia stock price has been in a strong bull run this year, helped by the ongoing artificial intelligence tailwinds.

It has now found substantial resistance at the all-time high of $184, which it may blast above after publishing its financial results.

While the stock may move in either direction after earnings, odds are that it will continue its bull run. It has slowly formed a rare pattern known as a bullish flag.

A bullish flag comprises two parts: a vertical line resembling a flagpole and a downward channel that looks like a hoisted flag. This pattern is

The pattern normally results in a breakout, especially when there is a catalyst, with earnings being the most important. It is shown in black below.

Nvidia share price has also formed a long-legged doji candlestick pattern, a common bullish reversal pattern comprising a long shadow and a tiny body. A doji candle is also a common bullish reversal sign.

NVDA stock price has remained above the 50-day and 100-day Exponential Moving Averages (EMA), meaning that bulls remain in control for now.

Therefore, the most likely scenario is where the NVDIA stock price makes a bullish breakout after earnings, possibly hitting the psychological level at $200, where it has resisted this year. Such a move will push its market capitalization to almost $5 trillion.

NVIDIA Share Price Has an Optimism Risk

However, the main risk is that optimism about the stock has jumped before earnings, with most analysts raising their forecasts.

TipRanks data shows Tristan Gerra, a Baird analyst, has pushed his outlook from $195 to $225, while C.J Muse of Cantor Fitzgerald has placed the target at $214. Other analysts from companies like Evercore ISI, Wedbush, UBS, Oppenheimer, Susquehanna, and Mizuho have raised their targets above $200.

The risk, therefore, is that market participants have already priced strong quarterly results. As such, even if the company publishes strong results, the stock could drop as investors book profits. This is a situation where investors buy the rumor and sell the news.

Key Details to Watch in NVIDIA’s Earnings Report

Analysts and investors are optimistic that the company will publish strong results. These analysts have been guided by the strong earnings reports of some of its biggest customers, like Microsoft, Amazon, CoreWeave, and Meta Platforms.

All these firms have pledged to continue their capital expenditure spending this year, which will benefit NVIDIA and other semiconductor companies.

The average estimate is that Nvidia’s revenue will be $46 billion, a 54% increase from last year’s period. This growth will be notable since the company did not do much business in China, one of its key markets. It will also be an impressive growth, as the revenue is expected to be significantly higher than in 2023.

The other important detail to watch in its earnings will be its profitability growth. Analysts expect its earnings per share to surge to $1.01 during the quarter.

These numbers, however, will be backward-looking, and their impact on the stock will be brief. Instead, the main catalyst for the stock will be NVIDIA’s forward guidance for the third quarter and the full year.

According to Yahoo Finance, 40 analysts expect the company’s third-quarter revenue to be $52.7 billion, representing 50% annual growth, while the EPS is expected to be $1.19. The annual revenue is expected to be a whopping $203 billion n

To sum it up, Nvidia’s earnings are expected to be strong, and the bullish flag pattern points to a strong rebound after its earnings.