• Nvidia’s stock reached an all-time high, hitting over $540 per share.
• Investors wonder if the rally will continue beyond these levels.
• With the stock near critical resistance at $495, a weekly close above this level could propel it to $730 and even $1,000.

Nvidia witnessed a remarkable 239% surge in 2023, significantly contributing to the market’s 24% gain. However, the AI giant is off to a strong start in 2024, marking an 8.46% performance since the new year and hitting a new all-time high, despite the S&P 500’s stagnant movement.

The burning question now is whether Nvidia can sustain this upward momentum throughout 2024 or if the rally has reached its peak.

Nvidia’s exceptional performance in 2023 can be credited to its financial results, consistently surpassing expectations as it dominated the burgeoning field of artificial intelligence, solidifying its position as the market leader in chip production for AI applications.

The company’s Q3 saw sales surge over 200% to $18.1 billion, while net profit soared from $700k to an impressive $9.2 billion in the latest quarterly results. (Source: InvestingPro)

Can the Chipmaker Sustain its Growth?

Nvidia, as the industry front-runner in artificial intelligence, possesses ample room for further growth given the sector’s infancy. Its robust financial start in 2024, coupled with high expectations for the last quarter’s results, reinforces this trajectory. (Source: InvestingPro)

Besides leading the semiconductor industry, Nvidia boasts high scores in profitability, cash flow, and growth, making it an attractive option for long-term investors with regular dividend payments, all pointing to the potential for sustained momentum in 2024. (Source: InvestingPro)

Forecasts for Q4 2023 predict an EPS of $4.5 and a quarterly revenue of $20 billion, with further catalysts for share price momentum if Nvidia continues to outperform. (Source: InvestingPro)

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Bargain stocks are currently in the spotlight, stealing the limelight from once high-flying growth stocks that now teeter on the edge of a market bubble. In this era of market shifts, the allure of value stocks beckons, offering long-term growth potential and enticing price points. These undervalued gems, hidden beneath the glitz of market stars, present a golden opportunity for investors seeking diversification and solidity in their portfolios.

The Hunt for Genuine Value

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Discovering the Underdogs: Pfizer (PFE)

Source: Manuel Esteban / Shutterstock.com

% Below 52-week high: 36.3%

Pfizer (NYSE:PFE) has weathered a tumultuous year, seeing its stock price plummet by over 30% due to a decline in revenues from its COVID-19 vaccine. Yet, beneath the grim exterior lies a resilient contender. A closer examination reveals an overreaction in the market, magnifying pessimism towards PFE stock. Coupled with an enticing 6% dividend yield, Pfizer emerges as a compelling value play.

Financial Luminaries Shine Bright: H&R Block and JD

Projections for 2024 suggest a 60% rise in EPS to $20 and a 54% revenue increase to $90 billion, which, although lower than 2023’s leap, are subject to revision based on performance throughout the year. (Source: InvestingPro)

The stock’s impressive 2023 performance saw a significant rise in the first half of the year, with a mere 16% increase in the latter half, signifying a consolidation phase. This leaves the stock with a low Price/Earnings ratio relative to the price, making it look attractively undervalued as financials continue to ascend.

Technical Outlook

Technically, the NVDA rally has slowed at Fibonacci expansion levels relative to the previous year’s downtrend, with the Fib 1,272 – Fib 1,618 range marking support and resistance for the share price. (Source: InvestingPro)

If there is a clear weekly close above the critical $495 price level, a renewed rally towards $730 and potentially $1,000 may ensue, underpinned by the Stochastic RSI pointing to a similar trajectory as seen in early 2023. However, a correction should not be discarded, with support at $490 and $450 for potential downswings. (Source: InvestingPro)

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Disclaimer: The author does not own any of these shares. This content is prepared for educational purposes only and should not be taken as investment advice.