On Friday, Nvidia Corp (NASDAQ:NVDA) shares edged slightly lower after announcing the purchase of the formal notification company Oski Technology. NVDA has been in a partnership with the safety verification platform for over ten years but now deems it even more important for verifying notifications amid its rapid expansion to other markets.
The company has a growing range of products from gaming and data centre computing to networking and autonomous vehicles. As a result, safety has become even more crucial, thereby raising the need for the verification of autonomous machines. The acquisition gives Nvidia a stepping stone to increasing its investment in formal verification strategies.
Nvidia’s exciting outlook
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From an investment perspective, Nvidia has rapidly diversified its business from manufacturing graphics processing units to networking, data centres and even cars. As a result, the company has tapped into several high-growth markets, boosting its long-term outlook.
Therefore, although the stock trades at a steep P/E ratio of 75.29, making it less attractive to value investors, growth investors could find it compelling.
Analysts expect Nvidia earnings per share to grow 52.50% this year before rising at an average annual rate of 32.60% over the next five years. Therefore, investors willing to overlook its steep valuation could receive significant returns in the long term.
A solid rebound
Technically, Nvidia shares appear to be trading within a descending channel formation in the intraday chart. However, the stock recently made a solid rebound off the 100-day moving average, surging towards the trendline resistance.
Therefore, with shares still far from reaching the overbought conditions of the 14-day RSI, investors could target extended gains at about $219.77, or higher at $230.05.
On the other hand, if the trendline resistance triggers a pullback, the stock could find support at $197.56, or lower at $187.20.
It could be time to buy NVDA shares
In summary, although Nvidia appears to be trading under significant bearish pressure, the stock has recently bounced back to surge towards the trendline resistance.
Therefore, with the company offering exciting growth prospects and shares far from reaching overbought conditions, the current rebound could continue to the foreseeable future.
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