Nvidia share price returned to the upside in the pre-market session on Tuesday, rising by 2.6 percent to trade at $121.20 at the time of writing. NVDA has been on a steep decline in the last three days, during which its share price dropped by 13.4 percent from $130. The losses proved infectious in the financial markets, as it dragged tech stocks and other equities with it. The S&P 500 index mirrored Nvidia’s decline, with three consecutive session losses, amounting to 0.7 percent. The Dow Jones Index was down by 0.1 percent in Monday’s session.
The nosedive by Nvidia’s share price has been attributed to profit-taking by investors after the company’s hot streak in the stock market that saw it briefly occupy the top spot as the world’s largest company by market capitalization a week ago. Nvidia’s share price losses translate to a decline in its valuation by $500 billion, slightly less than oil giant Exxon Mobil’s $511 billion valuation.
Not only investors, but Nvidia’s board members and top management have also sold some of their stocks. For example, CE0 Jensen Huang sold $95 million worth of shares in the last two weeks. In addition, the company’s position in the stock market had been overbought, with many investors agreeing that that had led to its overvaluation.
The stock split helped pump up prices, as it became apparent that more retail investors would be able to afford investing in the AI juggernaut. That said, news that Apple has approached Meta to integrate its Generative AI into the Apple Intelligence system is slowly taking some attention from Nvidia, and could trigger more losses for Nvidia if some investors decide to diversify their AI portfolio.
The momentum on Nvidia share price shows that the buyers are currently in control, and extended action above that mark will see the upside prevailing. However, the upward momentum likely to meet the first resistance at 122.16. Extended control by the buyers could breach the resistance, at which point the downside narrative will be invalid. In addition, that could result in further gains to test 124.68. Conversely, the downside could prevail if the share price breaks below 119.36. That could see the first support established at 116.37, but a break below that mark will strengthen the downside for a potential take on 113.00.
This post was last modified on %s = human-readable time difference 13:44