Nvidia stock cleared its 50-day moving average on Friday after Amazon's earnings. Amazon's run up in capex in the first quarter was largely due to demand for its artificial intelligence services.
Amazon's capex for the first quarter jumped to $24.3 billion from $13.9 billion in the same quarter a year ago.
Late Wednesday, Magnificent Seven leaders Meta and Microsoft reported quarterly results that beat estimates. Meta increased its capital expenditure for 2025 to support its "artificial intelligence efforts".
Alphabet, an Nvidia partner, last week crushed estimates and maintained its $75 billion capital spending plan. Does that mean Nvidia stock is a buy now?
But earlier this week, Nvidia stock was given a sell rating at Seaport Research as it initiated coverage with a sell rating and a price target of $100. Analysts see "significant complexity required for deployments of Nvidia systems in comparison to traditional data centers." They also see the artificial intelligence spending boom slowing in 2026.
Nvidia shares had declined Monday following news that China's Huawei Technologies is testing a new artificial intelligence chip that could have higher capabilities than Nvidia's H100.
May Deadline Looms
The Biden administration issued new regulations on chip exports on Jan. 13. Those restrictions will come up as a 120-day comment period ends in May, according to The Wall Street Journal.
The restrictions will impose control over how "America's leading semiconductors, computers, systems, and even software are designed and marketed globally," Ned Finkle, Nvidia's vice president of government affairs, said in a statement in January.
Ken Glueck, executive vice president at Oracle, said the new rules could reduce the global chip market by 80% for U.S. chip companies, and that "a rule of this consequence on that timetable will turn the U.S. cloud industry upside down."
Nvidia Stock: Volatility Amid Tariff Risk
A flurry of tariff news spurred volatility in Nvidia in April. Nvidia stock surged amid a historic rally when President Trump recently announced a 90-day tariff pause for most countries. But Trump followed that up by increasing tariffs on China to 125% after that nation imposed tariffs of 84%.
Trump exempted semiconductor products from those steep tariffs. On Truth Social, however, he mentioned that nobody was getting "off the hook". U.S. Commerce Secretary Howard Lutnick said sector tariffs on semiconductor imports would land in about a month.
Meanwhile, Nvidia announced it plans to make AI supercomputers entirely in the U.S. The company's blog says it has "commissioned more than a million square feet of manufacturing space to build and test Nvidia Blackwell chips in Arizona and AI supercomputers in Texas". Mass production is expected to ramp up in 12 to 15 months.
The Trump administration added several Chinese companies to an export blacklist on national security concerns. U.S. companies selling chips to those firms will need to get government approval first.
Nvidia also will need a license to export its H20 chips and expects a charge of $5.5 billion in its first quarter which ends on April 27, according to its filing with the Securities and Exchange Commission. But analysts believe that the company may not be granted the license.
Won't Hurt 'In Short Term'
At the GTC conference in March, Nvidia Chief Executive Jensen Huang noted that tariffs would not hurt the company "in the short term" as it seeks to move more chip production to the U.S.
In terms of its 12-month price performance, Nvidia has outperformed just 60% of all other stocks in Investor's Business Daily's database.
And on IBD MarketSurge, IBD's premium stock research platform, the 200-day moving average has crossed above the 50-day moving average in what is known as a "death cross." When the longer-term moving average rises above the shorter-term line, the chart indicates weakening action.
Nvidia's relative strength line, which compares the stock with the S&P 500 index, is rising.
Nvidia Results Beat Views
Nvidia beat analyst earnings estimates on Feb. 26. Despite that, shares sank 8% the next day before heading even lower.
For its fourth quarter, the AI chip leader earned 89 cents per share on $39.33 billion in sales. Analyst estimates had called for 85 cents in earnings per share and sales of $38.1 billion. Nvidia is the only Magnificent Seven company to report a revenue surprise this earnings season.
Top three regions by sales were the U.S. at 47%, Taiwan at 16% and China, which accounted for 13% of total sales. The company also said three customers now account for more than 10% of revenue.
Among Nvidia's products, Blackwell already has become its fastest-growing segment, the firm's management said. For the current quarter, Nvidia expects adjusted gross margins of 71%.
Big Techs Confirm Huge Spending Plans
Earlier this year, Amazon indicated it planned to increase its spending by 27% or $105 billion — mostly on AI data centers. But that was topped by Alphabet which plans to increase its spending by 57% for a total of $75 billion.
"Most AI (computing) has been driven by Nvidia chips, and we obviously have a deep partnership with Nvidia and will for as long as we can see into the future," Amazon CEO Andy Jassy said on its fourth-quarter earnings call in February.
However, Microsoft's spending on AI data centers is set to slow next year. Microsoft announced in December that the company faced no chip supply constraints.
View More Trump Tariffs News And Analysis
Funds own 40% of Nvidia's outstanding shares, according to IBD MarketSurge. Going by its Accumulation/Distribution Rating of D-, it would seem that funds aren't buying shares. The rating measures price and volume action over the last 13 weeks.
Nvidia Earnings
For Nvidia, its earnings growth is its strong point.
It also replaced Intel in the Dow Jones Industrial Average in November, becoming the fourth Magnificent Seven stock to join the list of blue chips. The others are Apple, Amazon.com and Microsoft.
The AI chip behemoth has an ideal Earnings Per Share Rating of 99. Further, the stock's all-around strength, or Composite Rating, sits at 81.
IPhone Moment Of AI
Nvidia's graphics processing units help accelerate computing in data centers and AI applications.
The company pioneered graphics processors used in such industries as health care, game machines, automobiles and robotics.
In March 2023, generative AI took a leap forward with OpenAI's ChatGPT. According to CEO Huang, Nvidia's AI-capable chips paved the way for the "iPhone moment of AI."
That helped Nvidia turn the tide on its results. It had reported three quarters of declining year-over-year sales. It also showed four quarters of tapering earnings in late 2022 and early 2023.
But then the company achieved record top- and bottom-line growth in the seven most recent quarters.
Is Nvidia Stock A Buy?
Looking at chart signals and technical measures can help investors assess whether Nvidia stock is a buy or sell now.
Nvidia has retaken the 50-day moving average which could be an early entry. Investors can also wait until the stock forms a base and offers a proper buy point.
