Key Insights
- Nvidia stock price has crashed by 12.5% from its highest level in 2025.
- The stock has more upside after TSMC published strong financial results.
- It has formed a bullish pennant pattern, pointing to more gains.
Nvidia stock price remains in a deep correction. The Dow Jones and S&P 500 hover at their all‑time highs. The Nasdaq 100 also stays near record levels.
NVDA stock was trading at $184, down by 12.5% from its highest level in 2025. Still, some potential catalysts may drive a comeback in the near term.
Nvidia Stock Price May Benefit From the Latest TSMC Earnings
One of the key catalysts for the NVDA stock price is that TSMC, its manufacturer, reported strong financial results. It’s a sign that AI spending accelerated in the final quarter of the year.
While TSMC serves many companies like Apple, Microsoft, and AMD, Nvidia is believed to be its biggest client. As such, its strong numbers are hinting that Nvidia’s business continued to thrive as the year ended.
TSMC’s revenue rose by 20% to $33 billion, much higher than what analysts were expecting. The company will publish its full quarterly results and forward guidance on January 15.
Media reports suggest that the company’s demand, especially for its H200 chips, is strong. This will lead to more demand and sales.
A recent report by Reuters said that Nvidia was putting more pressure on TSMC to ramp up production. This happened as it had received over 2 million chips, higher than the 700k it had in its inventory. Each chip costs about $27,000, meaning that the company will easily make $54 billion.
Another report published on Thursday showed the company required Chinese firms to pay upfront. It sought to hedge against uncertainty over Beijing’s approval of the shipments.
Nvidia Earnings Growth to Be Better than Estimates
The next important catalyst for the Nvidia stock price is that the company has more room to grow as the AI boom accelerates.
Notably, the company’s revenue and profitability estimates did not include any Chinese business. Similarly, analysts’ estimates also does not include these estimates, meaning that the numbers will be much better.
The current estimate is that the company’s fourth-quarter revenue will come in at $65.2 billion. It was up by 66% from what it made in the same quarter a year earlier. This growth will translate to an annual revenue of $213.25 billion, up by 63% from 2024.
Nvidia has some of the best margins in the tech industry, with the profit margin being over 50%. As a result, the earnings per share (EPS) is expected to be $4.69, up by 56%. The earnings growth is expected to be significantly better than the broader S&P 500 estimate of approximately 13%.
Nvidia’s growth momentum will likely continue this year, with the average revenue estimate being $319 billion, up by 50% YoY. A review of Nvidia’s results reveals that the company’s actual revenue and estimates are typically higher than those of analysts.
Therefore, these numbers, together with their growth potential, mean that the company’s business is trading at a bargain. For example, data compiled by Yahoo Finance shows that its forward price-to-earnings stands at just 24.21, down from 33.9 a year ago.
Nvidia Stock Price Technical Analysis Points to a Rebound
The weekly chart shows that the NVDA stock price has remained in a tight range in the past few months. A closer look shows that the stock is in the process of forming a bullish pennant pattern, which is made up of a vertical line and a symmetrical triangle pattern.
The stock has also remained above the Supertrend indicator, which is a sign that bulls are in control. It has also remained above all moving averages.
Therefore, the stock will likely have a strong bullish breakout in the coming weeks as bulls target the all-time high of $212, which is 15% above the current level.
A surge above that level will point to more gains, potentially to the psychological level at $250. On the flip side, a move below the support at $162, the 50-week moving average, will invalidate the bullish outlook.
The post Nvidia Stock is Stuck in a Correction: Here’s Why it May Rebound appeared first on The Market Periodical.