Why Nvidia Could Refill its Bearish Gap around $280

Nvidia (NVDA) is seeing a solid start to the new year, as hoped.

In fact, as we noted on Dec. 9, “The company should continue to benefit from its massive push into virtual reality, the metaverse, and the company’s Omniverse.  Two, billionaires like John Overdeck and David Siegel recently bought over 1.2 million shares of NVDA.  Three, while NVDA had a rough outing in 2022, don’t write it off just yet.  Remember, it’s still a leader when it comes to the cloud, artificial intelligence and machine learning, gaming, autonomous driving, supercomputing, robotics, drones, and more.”

At the time, NVDA traded around $172.  It’s now up to $224.92.  And if it can break above resistance dating back to late April 2022, it could potentially refill a bearish gap around $280.

Better, Bank of America just put out a buy rating on the stock and raised its price target to $255 from $215.  Nvidia’s “full-stack of accelerated silicon/systems/software/developers positions it uniquely to lead the nascent generative AI arms-race among global cloud and enterprise customers,” wrote the firm, as noted by Barron’s.

They added, “The analyst estimates the adoption of generative AI services like ChatGPT could grow Nvidia’s revenue by 25% annually through 2027. He said large-language models used by ChatGPT and other services require much more computing power, boosting demand for chip makers such as Nvidia.”

Again, if NVDA can break above resistance dating back to late April 2022, it could potentially refill a bearish gap around $280.