NVIDIA (NASDAQ:NVDA) has become another top “blood in the streets” opportunity. Since peaking in February at $316.13, NVDA stock crumbled to $209, where it has now become an oversold bargain at 200-day support.
It has also become aggressively oversold on relative strength (RSI), MACD, and Williams %R. With plenty of second half catalysts, I strongly believe NVDA will refill its bearish gap at $300, near-term.
Granted, there may be more pain ahead for semiconductor stocks. However, Bernstein analyst Stacy Rasgon says investors should consider buying the dip.
“Presumably the situation (however long it lasts) will prove ultimately temporary,” he wrote. “Overall demand levels won’t (in the long term) be permanently impaired. Hence we could see downside (eventually) provide selective buying opportunities,” Rasgon said
He added that Nvidia is attractive because it is likely to launch new products this year.
It’s just part of the reason Bank of America’s Vivek Arya just reiterated a buy rating on NVDA stock with a $300 price target. Rasgon also said the company could benefit from a PC GPU upgrade cycle on par with what was seen following the launch of prior generation consoles, as highlighted by Benzinga contributor, Shanthi Rexaline.
And while the company did lower its revenue guidance to $2.2 billion, plus or minus 2%, it appears the latest pullback priced most of that in.
Other Long-Term Catalysts for NVDA Stock
When it comes to Nvidia, ignore the noise, and focus on the long-term opportunity thanks to gaming, data center resources, autonomous vehicles, and even artificial intelligence.
For one, it will benefit from the new consoles coming out later this year. As consoles and games get better, more processing power is required. That means Nvidia will need to develop even more chips. Better, according to CFO Collette Kress, “gaming is thriving.”
Plus, it’s benefiting from several new trends in esports, new games coming out that support NVIDIA’s RTX ray-tracing technology, and the booming demand for gaming notebooks, as highlighted by Motley Fool contributor John Ballard.
Datacenter revenue is still surging, as well. In fact, revenue was up 43% year over year thanks to higher demand for AI workload chips. Some of the top companies using its chips include Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Domino’s (NYSE:DPZ).
The Bottom Line on Nvidia Stock
Again, when it comes to NVDA stock, ignore the noise. Focus on the long-term opportunity, and the fact the stock is wildly and temporarily oversold. Once the smoke clears with the coronavirus story, I strongly believe NVDA stock will refill its bearish gap at $300.
Of course, plenty of patience will be required.
Ian Cooper, an InvestorPlace.com contributor, has been analyzing stocks and options for web-based advisories since 1999. As of this writing, Ian Cooper did not hold a position in any of the aforementioned securities.