Nvidia is approaching resistance amid positive expectations

Nvidia (NVDA) shares edged up 0.27% in the previous session, underperforming both the S&P 500 (+0.58%) and Nasdaq (+0.55%).

Over the past month, Nvidia shares have gained 0.32%, trailing the Computer & Technology sector (+0.6%) but outperforming the S&P 500 index, which declined 0.84%.

Investors are eagerly awaiting Nvidia's earnings report, scheduled for release on May 28, 2025. Earnings per share are projected at $0.87, up 42.6% from the previous quarter. Revenue is expected to reach $42.68 billion. This represents a 63.9% increase year-over-year.

These projections reflect market confidence in Nvidia's positive near-term business outlook.

The company currently demonstrates favorable valuation metrics. Its P/E ratio (price-to-earnings) stands at 25.66—in line with the semiconductor industry average. Meanwhile, the PEG ratio (factoring in earnings growth) is 1.04, significantly below the sector average of 1.91. This may indicate the market is undervaluing the company's growth potential.

Nvidia's sector—semiconductors—ranks among Zacks' most promising industries, positioned in the top 34% of over 250 tracked sectors. Strong, sustained demand for AI, machine learning, and IoT-related products continues to support the company's fundamental strength.

From a technical analysis perspective, the NVDA H4 chart shows a descending trend channel. Market uncertainty tied to global trade risks manifests in this widening channel with sustained high volatility. However, the most recent price impulse appears upward. Notably, positive readings on both Bulls and Bears Power indicators (standard settings) suggest buyer dominance. The stock price now approaches channel resistance.

Signal:

The short-term outlook for NVDA is to buy.

The target is at the level of 122.00.

Part of the profit should be taken near the level of 115.15.

A stop loss could be placed at the level of 110.15.

The bullish scenario is short-term, so a trading volume should not exceed 2% of your balance.