• Nvidia (NVDA) rose as high as 5% on Friday morning, after the semiconductor company posted earnings that beat Wall Street expectations.
  • However, the stock’s market cycles point to a pullback in the first half of the year.

The company reported earnings per share of $0.92 and total revenue of $2.2 billion, which was above the average analyst estimate. For the quarter, management’s sales guidance was $2.2 billion plus or minus 2%, compared to consensus of $2.32 billion.

CEO Jensen Huang said, “This was a turbulent close to what had been a great year. Despite this setback, our fundamental position and the markets we serve are strong.” However, the company a few weeks ago had lowered its guidance, prompting the stock to fall 14%.

In analyzing the NVDA’s market cycles, we can see that it is still in the rising phase of its current cycle. However, it has retraced only 23.6% of the decline from its previous cycle, which indicates a weak recovery. We expect a test of its recent low around $122 by May.

For more from Slim, or to learn about cycle analysis, check out the askSlim Market Week show every Friday on our YouTube channel.