Should You Hold NVIDIA Stock for the Long Haul or Trade It?

Key Points

• NVIDIA stock might be the best opportunity for both investors and traders alike. This mix is as uncommon as the upside in the name.
• There are some levels that traders can keep in mind when it comes to entries and exits, keeping them safe.
• Wall Street analysts and institutional investors see the potential in a new run for NVIDIA stock in the coming months.

High-profile stock market stories tend to carry a stigma for investors in the sense that few know whether it’s best to trade these names or just hold them for the long haul. Today, the largest share of attention and capital is centered around the technology sector in the United States, particularly in names exposed to artificial intelligence and its development.

This is where NVIDIA Co. NASDAQ: NVDA comes into play. Investors can definitely point to the stock’s previous success in price action as a testament to its future importance, but that doesn’t mean they have to necessarily keep it and not enjoy the short-term opportunities in the name. Because it’s become popular among investors, the stock offers tremendous volatility for traders to enjoy short-term gains.

So, two camps are present regarding the future of NVIDIA stock, though they don’t necessarily have to be pinned against each other. Investors holding out to the company's future potential valuations are set for reasons that will become clear in just a bit, but these same reasons also bring those looking for short-term price action swings into safety.

The Best of Both Worlds

When stocks like Apple Inc. NASDAQ: AAPL become so big and important in the global economy and the stock market, this long-term stability and recognition usually come at the expense of price action and volatility, leaving an entire breed of traders out of the game.

This is where long-term value investors like Warren Buffett like to live, unbothered by whipsaws.

However, those who employ a more active strategy, trading in and out of positions to make faster profits, could never wake up and dream of trading Apple stock since its size has driven it down to low beta status. Even on wild days for the S&P 500, stocks like Apple still don’t give traders much to be excited about.

This is where NVIDIA is unique because it offers both a long-term value perspective for those who hold it and short-term volatility through its 1.6 beta measure, allowing traders to come in and grab their fair share of the action.

Knowing this, here are some factors that drive opportunity for both camps, starting with the traders.

Profitable Areas For NVIDIA Traders

Starting with ranges to look for, a midpoint of $138.25 per share has proven to be one of the most liquid areas for NVIDIA stock over the past quarter. This means traders should consider that price a magnet, calling for the activity to be dealt with when things get slow.

When liquidity is grabbed at this price level, volume (and liquidity) seems to cut off at the $130 level on the downside and the $143 level on the upside for now. These levels have acted as great support and resistance over the past quarter, as investors can see the sharp price action behind them.

Overall, this represents a net move of $13 for NVIDIA, more or less a 10% move stretched out over two to four weeks. This is entirely reasonable, considering NVIDIA's high beta. More than that, given its size as one of the largest holdings in the S&P 500 and NASDAQ indexes, it is not a name Wall Street can let out of its sights for too long.

This fundamental setting gives it the volatility needed to make a profit while also providing safety for investors worried about a massive move in the wrong direction, as long as they stay within these two cutoff levels for the time being.

Of course, this excludes earnings, which will be released on February 26th, 2025. That day (or even a week) might be too much of a roller coaster ride for the average stomach to handle. That being said, this is the perfect segway to talk about the future for investors holding this stock.

Expectations Are High on Wall Street

Wall Street analysts now forecast up to $3.28 in earnings per share (EPS) for the second quarter of 2025, which would mean a jump of 300% from today’s $0.81 in EPS for NVIDIA. Some investors may think this potential growth is already priced in after NVIDIA delivered a 92% rally over the past 12 months.

However, that should be accompanied by a bet on the downside, as nonbelievers would call NVIDIA’s bluff running up to earnings. The opposite is true, given that NVIDIA’s short interest has declined over the past month. This is a sign of bearish capitulation to dismantle the belief that growth has been priced in.

More than that, institutional buyers from UBS Asset Management decided to boost their holdings in NVIDIA stock by 11.4% as of February 2025, bringing their net position to a high of $26.9 billion today. Ultimately, some analysts also seem unbothered by the sharp rally ahead of earnings.

Those from Tigress Financial recently reiterated a strong buy rating for NVIDIA, valuing the stock at up to $220 per share. This would mean a new 52-week high for the company and an implied rally of as much as 58% from where it trades today.