- Summary:
- NVIDIA share price rose to new highs past $1,100 on Tuesday as more capital inflows come in ahead of a share split.
NVIDIA share price rose marginally in the pre-market session on Wednesday, trading at $1,139.59 after gaining 0.05 percent. The stock rose to new all-time highs of $1,149.39 on Tuesday, setting the stage to stay on course for a third successive day of gains on renewed buying appetite. NVDA has risen by 20 percent a week after releasing record earnings and announcing a 10-for-1 share split.
There has been much talk about whether or not NVIDIA’s share price is overpriced. One undisputable fact, however, is that the company has backed up its stock market trajectory with a steady rise in earnings. Furthermore, there’s little argument on who is leading the AI race currently, as the company is not only miles ahead of the competition, but also spearheading innovation in that front. However, a question remains as to whether AI itself has been overblown and could be a bubble with a bit more elasticity than the dot com bubble.
However, investors seem convinced that the AI boom is justifiable, as the technology has the potential to be applied to almost every sector. This perception is likely to keep money flowing into the technology in the near and medium-term. The latest such inflow went to Elon Musk’s AI startup, xAI, which announced on Sunday that it had raised $6 billion in a Series B funding round. NVIDIA, has been reinvesting much of its income into development, with a relatively smaller portion going into paying dividends. This gives it a better chance of staying ahead of the competition with little struggle as far as capital goes. Furthermore, the stock split is likely to attract more buyers, as NVDA will become more affordable to more investors.
Technical analysis
The momentum on NVIDIA share price favours the buyers, and the upside will likely continue if the price action stays above 1,118.44. Furthermore, the upward push will likely encounter the first resistance at 1,153.71, but a break above that level could result in further gains to test 1,175.74. Alternatively, a move below 1,118.44 will favour the sellers to take control. With that momentum, the first support will likely be at 1,091.56. Furthermore, a break below that mark will invalidate the upside narrative and could push the price lower to test 1,070.29.
