1 Stock to Buy and 1 Stock to Avoid This Week: NVIDIA and Home Depot

Rising energy prices, the Fed’s FOMC minutes, and upcoming earnings from NVIDIA could shape market sentiment in the week ahead.

NVIDIA appears set for a potentially volatile and high-impact week as investors await its closely watched earnings report.

Meanwhile, Home Depot is confronting mounting challenges ahead of earnings, with expectations pointing toward a potentially underwhelming report.

U.S. stocks ended sharply lower on Friday, with both the S&P 500 and the Nasdaq Composite retreating from record highs as soaring energy prices fueled inflation concerns and pushed Treasury yields significantly higher.

Despite Friday’s selloff, the major U.S. indexes posted a relatively subdued weekly performance overall. The S&P 500 managed a modest gain of 0.1%, while the Nasdaq Composite and the Dow Jones Industrial Average slipped 0.1% and 0.2%, respectively.

The week ahead is expected to be relatively quiet on the economic data front. Investor attention will likely center on the minutes from the Federal Reserve’s April FOMC meeting, the final meeting chaired by Jerome Powell before the Fed’s leadership transition.

According to the Investing.com Fed Monitor Tool, the probability of the Federal Reserve delivering a 25-basis-point rate hike in December has climbed to nearly 50%, up sharply from roughly 15% just a week earlier.

On the corporate earnings front, results from NVIDIA are expected to be the week’s main highlight as earnings season nears its conclusion. Investors will also get a fresh read on the retail sector, with quarterly reports due from Walmart, Home Depot, Lowe’s, Target, and TJX Companies.

No matter which direction the broader market takes, below I highlight one stock that could attract strong buying interest and another that may face renewed downside pressure. Keep in mind that this outlook covers only the upcoming trading week, from Monday, May 18 through Friday, May 22.

Stock to Buy: NVIDIA

NVIDIA stands out as the top stock to watch this week as investors anticipate a potentially blockbuster earnings report alongside a notable increase in forward guidance. The AI leader is widely expected to deliver a double beat, topping Wall Street forecasts for both revenue and earnings per share, fueled by relentless demand for AI infrastructure.

The company is scheduled to release fiscal first-quarter results after the market closes on Wednesday at 4:30 p.m. ET, followed by a conference call with CEO Jensen Huang at 5:00 p.m. ET. In the options market, traders are pricing in a post-earnings move of roughly ±8% for NVDA shares.

Wall Street expects NVIDIA to post earnings of $1.75 per share, representing a 116% increase from a year earlier. Revenue is forecast to jump 79% to $78.8 billion, driven by sustained strength in AI data center demand.

Analyst sentiment has remained overwhelmingly bullish ahead of the report. According to InvestingPro data, 34 of the past 35 analyst estimate revisions have moved higher, underscoring strong confidence in the company’s ongoing growth trajectory.

CEO Jensen Huang is also expected to emphasize how hyperscalers and enterprise customers continue to accelerate spending on AI infrastructure, reinforcing the belief that the AI expansion cycle is still in its early stages despite the company’s already remarkable growth.

NVDA shares closed near $225 on Friday, retreating slightly after a powerful rally but still appearing well-positioned to advance further on favorable catalysts. Across multiple timeframes — from intraday charts to monthly indicators — technical signals and moving averages continue to point toward a “strong buy” outlook for NVIDIA.

With expectations already elevated yet the company continuing to outperform forecasts, Nvidia maintains strong momentum heading into earnings and may remain attractive for investors seeking exposure to the long-term AI growth trend.

Trade Setup:

• Entry: Approximately $225.00
• Exit Target: $242.00 (+7.5% potential upside)
• Stop-Loss: $213.00 (-5.3% downside risk)

Stock Pick to Avoid: Home Depot

By contrast, HD stands out as a stock to sell. The home improvement giant is set to release its Q1 earnings before Tuesday’s opening bell, and expectations suggest a weak report alongside cautious guidance that could pressure the shares.

Wall Street sentiment has turned increasingly negative ahead of the announcement, with all 22 recent analyst revisions moving lower. Meanwhile, the options market implies a post-earnings move of roughly +/-4.2% in either direction.

Wall Street expects the The Home Depot, Inc. to post earnings of $3.41 per share, down 1.1% from a year earlier, as margins remain under pressure from rising costs and increased promotional activity. Revenue is projected to climb modestly by 4.3% to $41.6 billion.

Consumer spending continues to weaken, especially for large-scale home renovation projects, as stubborn inflation, elevated gasoline prices, and high mortgage rates weigh on discretionary purchases.

Management has already warned of softer core demand, and any reaffirmation of that cautious tone — or even a slight cut to full-year guidance — would reinforce concerns about ongoing cyclical weakness in the housing and DIY markets.

Trading near a 52-week low at around $297.51, HD remains under heavy technical pressure. The shares are trading more than 10% below the 20-day moving average and nearly 30% beneath last year’s peak. While the RSI reading of 32.72 is approaching oversold territory, there are still few signs of capitulation or a meaningful reversal. Broader technical signals — including the Ichimoku Cloud, ADX, and MFI — continue to point to a strong bearish trend.

With the stock already weighed down this year by macroeconomic headwinds, any earnings miss or cautious commentary could trigger additional downside as investors continue rotating away from discretionary retail names exposed to weakening consumer demand.

Trade Setup:

• Entry: Around $297.50
• Target: $275.00 (+7.5%)
• Stop-Loss: $312.00 (-4.9%)