NVIDIA share price was down by 0.30 percent in the premarket session on Tuesday, trading at $121.42 on the second day of its stock split. There was an element of volatility in the share price on Monday, as the price shot to highs of $195.95 before settling down to the $120s territory. The ten-for-one stock split was announced in May as it became apparent that the share price would hit $1,000. While NVDA, in fact, rallied to cross that mark, such a high price also meant that many retail investors and even the company’s own employees would be unable to afford to buy a portion of the company.
The stock split has, therefore, opened up Nvidia to a larger market. Not only that, but it has also raised the prospects that the world’s leader in the AI space could be included in the Dow Jones Index. Nvidia’s share price exploits have seen its valuation cross the $3 trillion mark and rise past Apple to become the world’s second-most valuable company. These are a strong foundation upon which Nvidia could continue attracting investors, much as some analysts opine that the company is currently overvalued.
Regardless of the skeptical talk, however, the company’s rise to the top has been nothing short of phenomenon. For context, the current share price of $120 is the same as its unadjusted share price in October 2022. That means its value has risen ten-fold in just over two years!
That said, Nvidia will need other tech companies to make advancements in AI technology to sustain its rise. As it is, the hype around the technology could cool down if it doesn’t break the bounds of the current generative AI and large language models. For instance, Apple’s presentation in the Worldwide Developers Conference 2024 was underwhelming, leading to a 2 percent decline in its share price in the hours that followed. Therefore, Nvidia investors need to look beyond the current hype and into AI innovations taking place elsewhere in the tech space, because ultimately that’s where Nvidia’s growth prospects lie.
The momentum on Nvidia share price currently favours the buyers, and the stock will likely pivot at 120.90. The upward trajectory will likely continue if the buyers keep the price above that mark, but they could encounter the first resistance at 122.37. Furthermore, an extension of that momentum could break the resistance and propel further gains to test 123.20. On the other hand, a move below 120.90 will signal control by the sellers. The downward movement will likely find support at 119.90, and a break below that mark will invalidate the upside narrative. Furthermore, the momentum could push the price lower to test 119.00.
This post was last modified on %s = human-readable time difference 15:28