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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Nvidia

Market Opportunities - 04/08/2022

04 August, 2022

The example below uses Contracts For Difference (CFDs). Calculations are only on the price of the specific instrument on the date below and calculations indicate a possible opportunity for profit or loss. No representation or warranty is given as to the accuracy or completeness of this information, consequently any person acting on it does so entirely at their own risk.

Nvidia (#NVDA) weekly uptrend opportunity based On 1 Lot Calculation:

GLOBAL SEMICONDUCTOR INDUSTRY:

  • THE SEMICONDUCTOR INDUSTRY HAS GROWN 59% SINCE 2016 TO ~$555b: According to the most recent reports, the semiconductor industry is worth approximately half a trillion dollars. The size of the market in 2016 was ~$349b. Given the current value, the industry has grown 59% since 2016. Semiconductors are critical components in the move to digitization of society, and are used in artificial intelligence, automotive and telecommunications amongst other things.
  • MARKET POTENTIAL: THE SEMICONDUCTOR INDUSTRY IS EXPECTED TO GROW 55% BY 2030: Analysts are forecasting, that at the current rate of growth, the semiconductor industry is expected to reach $1trillion in value. Analysts at McKinsey highlight that this represents an industry growth of 6%-8% a year. The computing and data storage segment of this market specifically, is expected to grow 55% until 2030.

GRAPHICS CARD MARKET:

  • THE GRAPHICS CARD MARKET IS EXPECTED TO GROW ~30% PER YEAR UNTIL 2028: The global graphics card market is currently worth approximately $1b. According to reports, this market is anticipated to grow to $6.6b, representing a compounded annual growth rate of 30.4% per year between 2022-2028.
  • NVIDIA DOMINATES THE GRAPHICS PROCESSING UNIT (GPU) MARKET (81% MARKET SHARE): As of Q4 2021, Nvidia recorded a convincing 81% market share within the GPU market. The GPU market is a significant component in the development of AI. On average, an AI chipset requires at least 25% of it to be composed of GPU chips, which Nvidia makes. As AI becomes more advanced, the demand for GPUs will increase.

NVIDIA

  • Nvidia develops and produces three dimensional graphics processors and other related software. Additionally, the company also produces graphics processing units, which is a critical component when developing artificial intelligence and self-driving autonomous vehicles.
  • EVENT Q2 EARNINGS 2023 (CONFIRMED AUGUST 24, 2022): Nvidia is expected to report Q2 Revenue of $8.10b, which is a 43% increase Year-on-Year. Net income is anticipated to increase from $1.972b to $3.18b year-on-year, representing an increase of 61.4%.
  • EVENT TAIWAIN-CHINA TENSIONS COULD CAUSE SEVER DISRUPTION TO CHIP SUPPLIES: Taiwan is the largest advanced semiconductor producer in the world, accounting for 92% of total global production. Tensions could lead to a possible war and the globe could face severe advanced semiconductor supply problems, which could drive prices higher and translate to higher revenues for Nvidia.
  • US SENATE PASSES BILL WORTH $52 BILLION: The move comes after the Biden administration pushed for standalone legislation to boost computer chip production. The bill, also known as the Chips-Plus bill, has been passed by the US senate and is set to be signed by president Joe Biden.
  • ANALYSTS OPINIONS: Jefferies has a price target of $370, Wells Fargo target is $250 while JP Morgan targets $285. The Bloomberg Analyst Consensus has an average price target of $232.82.
  • STOCK PRICE ACTION: THE STOCK HAS HAD A DOWNWARD CORRECTION OF AROUND 60.00% FROM ITS ALL- TIME HIGH OF $346. The stock has fallen to its lowest rate since June, 2021, to $140.49 (July 5, 2022). Nvidia was last trading around $190, and If a full recovery follows to recent all- time highs, the stock could see an upside of around ~83%.

Nvidia, August 4, 2022
Current Price: 190.00

NVIDIA

Weekly

Trend direction

UP

Resistance 3

285.00

Resistance 2

250.00

Resistance 1

220.00

Support 1

170.00

Support 2

160.00

Support 3

150.00

Example of calculation based on weekly trend direction for 1 Lot1

NVIDIA

Pivot Points

Resistance 3

Resistance 2

Resistance 1

Support 1

Support 2

Support 3

Profit or loss in $

95,000.00

60,000.00

30,000.00

-20,000.00

-30,000.00

-40,000.00

Profit or loss in €2

93,540.76

59,078.38

29,539.19

-19,692.79

-29,539.19

-39,385.58

Profit or loss in £2

79,329.29

50,102.71

25,051.36

-16,700.90

-25,051.36

-33,401.81

Profit or loss in C$2

124,195.40

78,439.20

39,219.60

-26,146.40

-39,219.60

-52,292.80

  1. 1.00 lot is equivalent of 1 000 units
  2. Calculations for exchange rate used as of 11:50 (GMT+1) 04/08/2022

Fortrade recommends the use of Stop-Loss and Take-Profit, please speak to your Client Manager regarding their use.

  • You may wish to consider closing your position in profit, even if it is lower than suggested one
  • Trailing stop technique can protect the profit – Ask your Client Manager for more detail
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