Will the Nvidia Stock Price Hit $200 After TSMC and ASML Earnings?

Nvidia stock rebounded in the pre-market session. Positive reports from Taiwan Semiconductor and ASML pointed to strong chip demand. NVDA stock jumped by over 1% to $182, up by about 110% above the lowest point in April.

Nvidia Stock Price Boosted by TSMC and ASML Earnings

Micron, which manufactures storage devices used in data centers, reported revenue of over $11.32 Billion. That’s a sharp increase from $7.75 Billion in the same period last year.

TSMC, the world’s largest foundry company, also published substantial numbers that beat analysts’ estimates. Its profit jumped by 39% in the third quarter, while its revenue jumped to over $989 Billion. All these numbers were in line with expectations.

Most importantly, its high-performance computing division, which manufactures AI chips, experienced significant growth in the third quarter. This division now accounts for about 57% of its revenue. At the same time, the 7-nanometer chips now account for 74% of its wafer revenue.

These results are crucial for Nvidia, as the two companies have a long-standing history. Nvidia designs its chips and then hands them to TSMC for manufacturing.

TSMC serves major clients like Apple, AMD, Qualcomm, and MediaTek. Its strong results suggest Nvidia stock benefited from continued business momentum in Q3. That’s because it is one of its biggest customers in the industry.

Meanwhile, ASML, another important player in the semiconductor industry, also published strong results on Tuesday. The Dutch company said that its net sales rose to over 7.5 billion euros, while its net income was 2.1 billion euros.

ASML is also closely watched because it is the only company that manufactures lithography machines used to produce chips. These earnings confirm that the AI industry is still performing well, despite recent warnings of an AI bubble.

Still, these numbers are not a surprise, given the recent announcements in the industry. For example, Nvidia has recently announced a $100 Billion investment in OpenAI. It’s a move that will lead to more demand for its semiconductors.

Similarly, the company has invested $5 Billion in Intel, a fallen angel that dominated the industry. OpenAI has taken a 10% stake in AMD, a move that will also lead to more demand for chips. Other major announcements have involved companies like CoreWeave, Microsoft, and Nebius.

Analysts are Bullish on NVDA Stock

Wall Street analysts are highly bullish on NVDA stock, citing substantial demand for its chips and a relatively fair valuation. The most recent upgrade came from HSBC, which upgraded it from a hold to a buy rating.

The bank now estimates that the stock will surge to $320, an 80% increase from the current level. It’s a move that would bring its market capitalization to over $8 Trillion. Therefore, about 80% of all analysts tracked by Bloomberg recommend buying the company.

One notable aspect of Nvidia stock is that it is not overly expensive, especially considering its ongoing growth. Analysts expect the company’s revenue to rise by 55% to $54.64 Billion in the third quarter and by 58% for the whole year.

Despite this, the company has a forward P/E ratio of 40 and a PEG multiple of 1.1. In contrast, Tesla stock has a forward P/E multiple of over 200.

Nvidia Stock Price Technical Analysis

The daily timeframe chart indicates that the Nvidia stock price has remained within a tight range over the past few days. It remains below the critical resistance level at $194, the all-time high.

On the positive side, the stock remains above all moving averages. It has also formed a small hammer candlestick pattern, which consists of a body and a long lower shadow.

Therefore, the most likely scenario is where the NVDA stock price rebounds and possibly hits its all-time high. A move above that level will signal further gains, potentially reaching the psychological level at $200 and above. This rebound may occur in the lead-up to the upcoming earnings.