Could the GTC Be the Catalyst for NVIDIA After Its Pullback?
NVIDIA's share value surged to an all-time peak last Friday, only to pivot sharply and close the session with a decline exceeding 5%—its most significant one-day fall since May 31 of the prior year, closing at $875.28.
$NVIDIA(NVDA.US$'s early session gains exceeding 5% drove momentum indicators to a peak not seen since November 2021. The stock's Relative Strength Index (RSI) briefly soared past 85, suggesting an overbought condition, leading investors to lock in profits. Mizuho analyst Jordan Klein commented, "NVIDIA's sharp Friday sell-off reflects rally fatigue. The overbought semiconductor sector, once it starts to decline, sees quant-driven selling followed by retail panic, hastening the drop."
Moreover, as the weekend approached, traders began exercising in-the-money call options on NVIDIA, which prompted option dealers to offset their hedges by liquidating NVIDIA stock, leading to last Friday's sell-off.
Cathie Wood cautioned that NVIDIA's "Cisco moment" has arrived. As supply begins to catch up with demand and competition in the AI chip market intensifies, clients are starting to reduce orders, leading to expectations of a deceleration in NVIDIA's growth for the current quarter.
Morgan Stanley disputes the comparison, highlighting that NVIDIA shows a higher revenue growth rate of 90% with a lower P/E ratio of 30 times, unlike Cisco during the dot-com bubble. However, risks may still exist and are worthy of investors' attention.
Which catalysts should investors pay attention to?
GTC 2024: What to Expect from Nvidia's AI Conference
Scheduled for March 18-21, 2024, NVIDIA's GPU Technology Conference (GTC) 2024 promises a lineup of groundbreaking technological advancements that could fuel a new wave of vibrant investment.
● Enhanced hardware: NVIDIA's new AI processor, the Blackwell GB100, is set to premiere at the GTC conference. This promises to double its predecessor's performance, deliver 25% more high-bandwidth memory, and feature specialized acceleration modules, potentially driving NVIDIA's revenue by 2025.
In AI inference, the Lovelace L40S chip might not meet the high memory demands of large LLMs. NVIDIA is expected to unveil a new, affordable inference platform with GDDR7 memory to complement its existing offerings.
● Software improvements: Updates to NVIDIA's software suite, such as Enterprise AI and Omniverse, are anticipated to boost their capabilities and increase their overall value.
● Mobile advancement: NVIDIA's collaboration with MediaTek could enhance mobile GPUs, offering improved graphics and performance for handheld devices.
● AI affordability and efficiency: Anticipate talks on more accessible, economical AI, with a focus on edge computing and inference applications.
Potential Stock Split Could Fuel Price Surge
NVIDIA announced a four-for-one stock split in May 2021. The rationale for the split at the time was that it would result in a lower price per share, making the stock more accessible to a broader base of investors and employees. After the split, NVIDIA's stock price experienced a significant appreciation.
Last week, the stock approached the $1,000 milestone, sparking speculation about whether the company might opt for another split soon. Investors may view the stock more favorably due to the lower price per share, potentially increasing its liquidity. Ken Mahoney, CEO of Mahoney Asset Management, suggests a split might occur next year, potentially attracting retail investors deterred by the current high share price.
Source: Bloomberg, Marketwatch, Investopedia, Yahoo Finance
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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mr_cashcow :
frank Crane_3546 : Nvidia is disrupting general purpose computing to accelerated computing while Cisco is disrupting networking then the applification is much greater NOW!!!
frank Crane_3546 : Yes! Wanna see Jensen Huang’s Nvidia Platform & Soundware roadmap!!!!
frank Crane_3546 : Cathie is wrong on Cisco moment! Jensen will make sure Nvidia GPU sets will not be commoditised!!!!
JeddyHo : Cathy woods is a sore loser who wants a lower price point.
74150486 mr_cashcow: hh