Here's why buying Nvidia (NVDA) stock in December is an excellent strategy

Core Viewpoint - Nvidia's share price has recently dipped below the 50-day moving average, trading at $131, but analysts suggest this could be a setup for a significant rally, projecting a rise to $320 by summer 2025 [1][8]. Price Performance - As of December 16, Nvidia shares have decreased by 4.3% over the past five days and 5% for the month, indicating a period of consolidation that may lead to a rebound [1][2]. Technical Analysis - Technical analysis indicates a bullish setup, with Nvidia maintaining a consistent two-year Channel Up pattern, despite the recent drop below the 50-day moving average [3]. - The stock remains within the Higher Lows trend line of this channel, which has historically marked technical bottoms, with the 200-day moving average providing additional support [3][4]. Historical Patterns - Previous 'Bull Phases' in December 2022 and December 2023 resulted in gains of approximately 257.68%, suggesting that December is a pivotal month for Nvidia [5]. - Analysts believe the current sideways movement is part of the Accumulation Phase, setting the stage for the next upward surge [5]. Near-term Challenges - Nvidia faces near-term challenges, having underperformed compared to peers in the Magnificent Seven, with shares down 11% from the all-time high of $148.88 on November 7 [6]. - Geopolitical risks, including proposed U.S. regulations on advanced AI chip sales, may impact Nvidia's future revenue streams [6]. Long-term Outlook - Nvidia continues to dominate the AI semiconductor market, with strong demand from key clients like Amazon and Microsoft [7]. - Revenue is projected to grow from $60.92 billion in the fiscal year ending January 2024 to $131.89 billion by January 2025, and further exceeding $200 billion by January 2026 [7]. - Earnings per share (EPS) is expected to rise from $1.19 to $3.01 over the next year, reaching $4.51 by January 2026, indicating a strong financial position [7]. Conclusion - Despite near-term price weakness, Nvidia's historical patterns, technical support levels, and dominant role in AI suggest a strong potential for rebound, making the current dip an attractive investment opportunity for long-term investors [8].