After a period of fluctuation fueled by worries about a potential decrease in spending on artificial intelligence (AI), Nvidia (NASDAQ: NVDA) has been showing signs of recovery in February. The company’s forthcoming earnings announcement is being seen as a critical event that could influence the stock’s direction.

NVDA has managed to regain most of the value it lost following the DeepSeek AI-related sell-off. At the time of this report, the stock is valued at $139.40, showing a 0.40% increase for the day and almost a 0.8% gain since the start of the year.

With the company scheduled to release its earnings data on February 26th, market observers will be keenly interested in several key performance indicators. These include revenue growth, profit margins, the outlook for AI and data centers, and, most importantly, forward-looking statements for the remainder of the year.

It’s worth noting that Nvidia’s ability to maintain its stock price above the important support level of $120 after the DeepSeek-induced volatility may indicate that the firm has rebuilt investor trust prior to the much-anticipated earnings release. Currently, Nvidia’s financial progress continues to be robust, driven by its offerings in the AI sector.

For the fiscal quarter ending in January 2025, revenue is projected to reach $38.09 billion, representing a substantial 72.31% increase compared to the previous year. Generally speaking, should the company exceed these expectations and provide strong future projections—especially regarding its next-generation Blackwell chips—it could act as a major positive driver for the stock’s growth.

NVDA stock price forecast following earnings announcement

To gain insights into Nvidia’s potential stock performance post-earnings call, Finbold utilized its AI-powered price prediction tool. This AI model, employing various predictive algorithms, was tasked with forecasting NVDA’s stock price for February 28th, just two days after the earnings announcement.

Interestingly, the tool’s prediction suggested that NVDA’s stock price would remain stable above $140, establishing an average target price of $145, which implies a 3.94% increase from current levels.

This anticipated price point was reinforced by various AI models, namely ChatGPT-4o, Grok 2 Vision, and DeepSeek Chat. These models pointed to robust technical indicators and a favorable market mood as crucial factors contributing to the predicted upward trend.

Conversely, trading expert Peter DiCarlo, in a social media message on February 19, cautioned that Nvidia’s forthcoming earnings report could significantly influence its future path. Despite an existing strong long-term upward trend, he expressed reservations about the stock’s current price movement.

DiCarlo observed that Nvidia’s trading activity has consistently stayed above its weekly market bias for a period of two years, seen as a positive indicator. However, following a rapid sell-off triggered by the DeepSeek news, although the stock bounced back to close the gap, the weekly market bias has now shifted to negative, suggesting a need for caution.

Analyzing the monthly chart, indications suggest a possible reduction in institutional buying momentum. January’s trading concluded with lower price points, and February’s activity (still ongoing) is exhibiting lower peak prices—a pattern that could resemble a bull trap, where a temporary rise in price precedes a subsequent decline.

DiCarlo projected that Nvidia’s stock could potentially increase to a range between $140 and $150 before encountering resistance at a critical zone, after which a downward trend might resume. He recommended that long-term investors who made purchases below $50 or in the $70 to $80 range should consider realizing profits.

Ultimately, the trajectory of Nvidia’s stock hinges on the outcome of its February 26 earnings report. Favorable results could propel it beyond $150, while disappointing figures could validate DiCarlo’s concerns about potential downside.

Future outlook for Nvidia

Despite recent market fluctuations, Nvidia continues to be broadly perceived as a relatively secure investment within the AI sector. Nevertheless, the DeepSeek situation has placed pressure on the company to demonstrate its market leadership in the upcoming earnings announcement.

Crucially, with DeepSeek’s claims of achieving lower training costs for its AI models, Nvidia needs to reassure investors that its chip technology remains the preferred option in the AI field. Successfully doing so could potentially drive the semiconductor giant’s stock to new record highs.

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