Nvidia Corp NVDA is set to share its third-quarter earnings on Wednesday. Analysts predict earnings per share (EPS) of 75 cents alongside $33.12 billion in revenues after the market closes.

The company, based in Santa Clara, California, has seen impressive stock growth, rising 178.02% in the past year and 190.95% year-to-date.

On Monday, however, shares dipped by as much as 3.4% before some of the losses were recovered, as concerns about overheating in its new Blackwell AI servers unsettled investors.

Nvidia’s AI Strategy Faces Challenges and Early Adoption

The Information reported ongoing issues with Blackwell chips, including design flaws discovered in August that pushed production to the December quarter. Nvidia has downplayed these concerns, referring to the issues as typical engineering adjustments, but the implications are significant.

CEO Jensen Huang anticipates that Blackwell chips will drive billions in sales during the fourth quarter, with major clients like Meta Platforms Inc META, Microsoft Corp MSFT, and xAI already committed to purchasing them.

Dell Technologies Inc DELL has confirmed that it has begun shipping Blackwell servers in its PowerEdge systems, indicating early market acceptance despite existing concerns.

Next, we will assess the current stock performance of Nvidia and how it aligns with Wall Street’s expectations.

Read Also: Nvidia ‘Modestly At Risk’ Amid AI Chip Concerns, Analyst Notes: Momentum Money Swirling Around ‘Sells First, Asks Questions Later’

Buying Interest Grows as Nvidia Approaches Q3 Earnings

As Nvidia approaches the announcement of its third-quarter earnings, the stock is experiencing a mix of technical indicators. The charts show a moderate bearish trend, tempered by some buying activity.

Chart created using Benzinga Pro

Trading at $142.07, Nvidia stock presents mixed signals from key moving averages and momentum indicators.

The eight-day simple moving average (SMA) at $144.80 is above the current price, indicating short-term bearish momentum. Conversely, the stock is slightly above the 20-day SMA of $141.98, suggesting a hint of bullish momentum.

Longer-term trends still appear favorable for Nvidia, as both the 50-day SMA at $132.32 and the 200-day SMA at $109.62 remain below the current price, providing bullish confirmation for those optimistic about the company’s future.

Momentum indicators like the MACD stand at a strong 3.03, supporting a positive outlook. However, there is reason for caution, as the Relative Strength Index (RSI) is at 53.53, approaching overbought conditions.

While Nvidia’s stock price may feel pressure in the short term, the longer-term technical indicators suggest potential resilience before earnings are released.

The pressing question is whether the company’s fundamentals will align with the technical signals or if earnings will create further volatility. This may be a crucial moment for investors to reevaluate their positions.

Analysts Predict 28% Growth for Nvidia

Ratings & Consensus Estimates: Currently, analysts have a consensus rating of Buy for Nvidia stock, targeting a price of $162.97. Recent analyses from Stifel, Truist Securities, and Rosenblatt indicate a potential upside of 28.25%, with an average price target of $182.33.

Price Action: Nvidia stock closed Monday’s trading at $140.15, down 1.29%.

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