NVIDIA Corporation stock recently broke above the psychological $100 level. However, NVDA stock could be headed higher from here.
Shares of Santa Clara, California-based NVIDIA (NASDAQ:NVDA) have gained 3% through this week, closing the last trading session at a price of $102.55 per share. In contrast, shares of Sunnyvale, California-based rival AMD (NASDAQ:AMD) have dropped by nearly 5% from this week's open price of $14.48, to close the last session at a price of $13.98 per share. The recent movements in NVDA stock price and AMD stock price seem to be in total contrast to their respective performances in the year to date time frame. While AMD stock has notched up impressive gains of 23.3% in the year to date, NVIDIA stock had a relatively horrible time, dropping nearly 4% in the same timeframe. However, the recent change in direction of the stock price movements of the two companies could be a sign of things to come. The misery for NVIDIA's shareholders could be coming to an end, which could partly come at the expense of AMD. While we believe both AMD and NVIDIA could gain big from rapid growth in the AI, data center and autonomous car markets, NVIDIA seems to have edged ahead once again, which should help put an end to the misery of NVIDIA stockholders.
Will NVIDIA's GTX 1080TI Beat AMD 'Vega'?
In what has come as a probable surprise, given the tremendous hype which has surrounded AMD's upcoming Vega GPUs, credible benchmarks show NVIDIA's latest GTX 1080 Ti on top in performance comparisons. The CompuBench database now lists a new device codenamed 'AMD 687F:C1,' which, according to VideoCardz, is the all new AMD Vega GPU. VideoCardz believes this is the GPU which was used in the Doom ultra4K demo at CES 2017. More importantly, the Vega launch could be weeks away, rather than months.
As detailed by Mark Hibben in his Seeking Alpha post, AMD Vega falls short of the GTX 1080 Ti on every test in the CompuBench 1.5 desktop benchmark. However, the two GPUs performed closely on most of these tests, which can see AMD catch up through driver optimizations on its VEGA GPUs. A bigger worry should be the huge gap between the GTX 1080 Ti and the 687F:C1 on the CompuBench 2.0 desktop tests, where AMD's chip falls behind its NVIDIA counterpart in most tests by over 50%.
While the CompuBench tests might not be the final verdict on AMD's Vega GPUs, it could indicate that expectations are sky high, as far as the Vega GPUs are concerned. As Mark wrote, "OpenCL benchmarks don't paint a full picture of GPU performance, of course, but it's not a good sign that AMD's Vega falls short of Nvidia's year-old Pascal architecture in every single test."Expecting AMD to close such huge gaps in the short time to launch would be unrealistic, to say the least. Also, the fact that AMD will be competing against NVIDIA's GTX 1080 Ti, which will be cheaper to produce as it doesn't use HBM2 memory, will also stack the odds against AMD. Competing on price might not be an option for AMD this time around. The results from the initial benchmarks could lead to some selling in AMD stock, while this could just be the catalyst NVIDIA stock needs to surge higher. A look at the technicals indicates that NVIDIA stock might well be headed higher.
NVDA stock has breached its 20-day moving Average
NVIDIA technical charts indicate bullish momentum. The first trading day of the week (March 13) saw NVIDIA stock close above the key psychological level of $100 per share. More recently, NVDA stock closed above its 20-day moving average, which is an indicator of bullish momentum.
MACD crossovers are followed by a number of technical traders. When the MACD cuts the signal line from above, it is a bearish signal, which indicates that it may be time to sell. On the other hand, when the MACD rises above the signal line, the crossover is a bullish signal, which suggests that the price of the asset is likely to experience upward momentum and it might be the time to buy. As seen in the NVIDIA stock technical chart above, the MACD line has cut the signal line from below, which is a bullish indicator. The bullish MACD crossover, along with the bullish 20-day moving average crossover indicates that NVDA stock may be headed higher in the coming trading sessions.
A lot of expectations have accompanied the hype surrounding Advanced Micros Devices' Vega GPUs. However, initial compute benchmarks indicate that NVIDIA has pulled ahead of its smaller rival, once again. More importantly, the margin of outperformance by NVIDIA's GTX 1080 Ti in some of the tests might be just near impossible for AMDs Vega chips to overcome in the short time before launch. However, this is not the final verdict and is definitely not the 'deathly blow' for AMD, as the AI, data center and autonomous car markets are growing at a rapid pace, good enough accommodate the two competitors. But, this might just be the catalyst which NVIDIA stock needed to reverse its recent downtrend.
Looking for tech stocks to buy? Do take a look at our top stock picks, which have beaten the NASDAQ by over 130%. If you're interested, we have also picked our favorites from the auto sector, which have beaten the S&P 500 by close to 160%.