Nvidia - Bet On This Foolproof Chipmaker?
Across The Board Tumble.
On Thu, 11 Jul 2024 when a cooling June CPI inflation was released, US market took a tumble instead of charting new highs.
This was because investors have decidedly switch focus to interest “sensitive” stocks and ETFs.
As a result, Nasdaq fell -1.95% or -364.04 to 18,283.41. (see above)
Leading semiconductor stock Nvidia was not spared either.
On Thursday, Nvidia fell by -5.57% to $127.40 per share. (see below)
Technically.
As of Thu, 11 July Nvidia stock price:
- Is above its moving averages of 200-day, 50-day and 20-day.
- Has a relative strength index “neutral” reading of “56”.
Based on that, Nvidia is still has room to climb higher as it is neither “overbought” nor “oversold”.
Post Split So far.
On Fri, 07 Jun 2024, Nvidia has undergone a 10-for-1 stock split; after market has closed for the week.
On following Mon, 10 Jun 2024, it began trading, based on its split price of $120.88 per share.
Resistant and Support.
Although it is too “soon” to really speak of resistant and support levels due to recent stock-split, nevertheless, could still make some preliminary levels.
- Resistance Level: Current resistance level is around $127.40 (11 Jul 2024). This level represents a potential barrier for the stock to break through.
- Support Levels: Key support levels include: (a) $120.88 - the post-split price, which acted as initial support. (b) $125.83 - The lowest price on 5 Jul 2024 and (c) $118.74 - Lowest price on J11 Jun 2024.
Overall Performance:
- Market Cap: Nvidia briefly surpassed Apple as the second most valuable US company, with a market cap exceeding $3 trillion.
In a separate post by Financial Times, it delved into Artificial Intelligence (AI) technical bubbles. (see above)
Nvidia being the leading chipmaker of generative AI chips is right in the eye of the storm.
Although, there is a big investment boom in generative AI, companies are still figuring out (a) how to use it and (b) where to apply it.
A delay by the different industries’ adoption, could quickly become a risk for the whole AI boom.
This could be bad for Nvidia if and when companies decide generative AI is not that useful after all.
Fortunately, Nvidia has a couple of things going for it:
- Lots of big tech companies buy their chips, and these companies are still spending money on AI.
- Nvidia is about to launch new, lower-cost chips (The Blackwell) that could make AI more affordable, leading to a surge in demand.
The FOMO mentality is still pervasive (for now) with the bigger companies (with deep pockets) still willing to join in the "rush".
As such, it looks like Nvidia (the defacto leader) remains in an “advantage” position to benefit from generative AI boom, even if there's some uncertainty about the future of the technology itself.
Good news ! JP Morgan Q2 2024 earnings exceeding analysts’ forecast, was the catalyst needed to lift US market higher and close off the week on yet another high; especially for Dow Jones.
- Do you think Nvidia will continue to break new grounds stock price wise?
- Do you think US market will continue to power higher in the coming week as quarterly earnings reporting hits full speed?
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It’s definitely the best chipmaker!
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