NVIDIA Selloff Could Be Long-Term Opportunity

NVDA is a global leader in computer graphics processors, chipsets, and related multimedia software. It’s been at the forefront of the AI wave, powering much of the entire landscape.

But like many other stocks, NVDA has gone through a bad period of forced selling recently. Each red bar in the chart below signals unusually large volumes in NVDA shares. They reflect our proprietary Big Money outflow signal, pushing the stock lower:

It’s no wonder NVDA shares are down 28% this year. MAPsignals data shows how Big Money investors are shedding this quality name.

NVIDIA Shares Down, Time to Add?

When best-of-breed stocks are sold hard, history shows it’s often a buying opportunity for long-term investors. Institutional volumes reveal plenty. Each red bar below signals unusually large outflow volumes in NVDA shares:

Look at the stretch in 2022 – red bars for nearly a year. Capitulation was in full effect and share values fell. But those who bought during that time have profited handsomely since, even with the latest dips.

See, despite the near-term volatility, there’s a powerful fundamental story happening with NVIDIA.

NVIDIA Fundamental Analysis

A healthy fundamental backdrop makes this company worth investigating. As you can see, NVDA has had strong sales and earnings growth over the years, as well as healthy profits:

• 3-year sales growth rate (+80.1%)
• 3-year earnings growth rate (+225.9%)
• Profit margin (+55.8%)

Source: FactSet

Also, EPS is estimated to ramp higher this year by +26.2%.

NVDA has a track record of strong financial performance.

Marrying great fundamentals with our proprietary software has found some big winning stocks over the long term.

NVIDIA has been a top-rated stock at MAPsignals. That means the stock has unusual buy pressure and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

It’s made the rare Top 20 report multiple times in the last decade. The blue bars below show when NVDA was a top pick…sending shares higher:

There weren’t many Top 20 signals during 2022. But look at the Big Money buys that followed. Share values flew higher, and those brave enough to buy when the stock was down were rewarded.

Tracking unusual volumes reveals the power of money flows.

This is a trait that most outlier stocks exhibit…the best of the best. Big Money demand drives stocks upward.

NVIDIA Price Prediction

Given the fundamentals, it wouldn’t surprise to see the stock rise once again with Big Money support. Great companies don’t stay down forever.

Big Money selling in the shares is signaling to take notice. Given the historical gains, strong fundamentals, and recent big selling, this stock could be worth a spot in a diversified portfolio.

Disclosure: the author holds no position in NVDA at the time of publication.

If you are a Registered Investment Advisor (RIA) or are a serious investor, take your investing to the next level, learn more about the MAPsignals process here.