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Key Insights:
- NVIDIA stock price continued its strong rally this week.
- Palantir, a top AI company, published strong financial results.
- Its numbers show that the AI spending boom is accelerating.
NVIDIA stock price is on the cusp of surging to a record high. It has continued its uptrend as top AI companies publish strong financial results.
The NVDA stock was trading at $180 on Tuesday, August 5, a few points below the all-time high of $183. So, what is the most likely NVDA price forecast after the latest Palantir earnings?
Palantir Published Strong Q2 Earnings
One way to make a reliable NVIDIA stock price forecast before its earnings is to examine its top peers. Palantir is one of those companies because of its role in the artificial intelligence (AI) industry through the AIP solution it offers.
AIP is a software package that companies and government agencies use to develop their AI platforms. While Palantir may not be a big buyer of NVIDIA chips, its results can help in determining whether the AI industry is growing.
A report published on Monday showed that Palantir’s revenue jumped by 48% in Q2 to $1 billion. Most of this revenue growth came from companies, with the US commercial revenue jumping by 93%.
Most importantly, the company boosted its forward guidance, with the annual revenue expected to be between $4.14 billion and $4.15 billion. It also hiked its commercial revenue guidance and profitability.
These strong results have helped PLTR become a juggernaut with a market capitalization nearing the $400 billion mark.
Other Top AI Companies Had a Strong Quarter
Palantir joins other AI companies, which have published strong financial results for the second quarter. Taiwan Semiconductor, NVIDIA’s main manufacturer, reported a 44% bump in sales, which the company attributed to robust AI demand. Strong TSMC earnings point to higher NVIDIA sales.
NVIDIA’s top clients have also published solid numbers recently. Microsoft aims to spend over $30 billion each quarter on data centers, with most of this spending going to NVIDIA.
Meta Platforms, another top customer, boosted its capital expenditure plans by about $2 billion to between $66 billion and $72 billion. A substantial sum of this spending could also go to NVIDIA.
Amazon, another hyperscaler, is spending billions of dollars in the industry. It spent $31.4 billion in capital expenditure in Q1, and the management boosted its guidance. It now expects to spend $118 billion, a $18 billion bump from the previous estimate.
Apple is also starting to spend money on AI. This move will also benefit NVIDIA and other top players in the semiconductor industry. Apple has spent $3 billion in the last quarter, and Tim Cook believes that more is to come. He is also open to acquisition, with rumors suggesting that he may buy Perplexity.
At the same time, NVIDIA will benefit from the restart of chip shipments to China, one of the biggest markets in the industry. It is possible that the company’s products will undergo a review by Beijing on whether it has backdoors to US monitoring.
Analysts still believe that the era of double-digit growth for NVIDIA is still here. The average outlook is that the chip manufacturer’s revenue could come in as high as $52 billion.
NVIDIA Stock Price Analysis
The weekly timeframe shows that the NVIDIA stock price has continued its strong uptrend this week. The Relative Strength Index (RSI) has jumped to 72. It showed that the bullish momentum was gaining steam at press time.
Further, the Average Directional Index (ADX) rose to 23.5, its highest level since May 5. An ADX figure of 20 and above is a sign that a trend is strengthening.
The NVDA stock remained above the Supertrend indicator, which is a bullish sign. It also traded above all short and long-term moving averages. Therefore, the most likely scenario was that the NVDA price could continue its momentum, with the initial target being at $200.
Some analysts, especially those at Bank of America (BofA) and Morgan Stanley, believe that the NVIDIA share price will ultimately jump to $250. This move would push the company’s market capitalization to over $6 trillion. It will solidify NVIDIA’s status as the most valuable company globally.
