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News

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News

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Asset Watch

Can anything stop NVIDIA?

Tuesday, February 27, 2024

NVIDIA cemented its status as the AI leader on Feb. 21, posting blowout fourth-quarter earnings that smashed Wall Street’s expectations. CEO Jensen Huang also said “conditions are excellent for continued growth” in 2025 and beyond.
The outperformance also led Bank of America to increase its price target from $800 to $925. Its team of analysts wrote:
“Perhaps the most important new data point in NVDA’s earnings call was that AI inference contributed nearly 40% of AI computing mix in FY24/CY23. AI inference is correlated with revenue bearing AI which is supposed to be more competitive, as opposed to AI training which NVDA already dominates.”
In other words, NVIDIA controls AI training. And while AI inference has other relevant players, higher revenue from that segment highlights how NVIDIA continues to gain market share in other AI sectors.

Add it all up, and the bulls continue to celebrate. But will the good times last?

Robust momentum cuts both ways and to avoid getting caught on the wrong side, pay close attention to NVIDIA’s 50-hour moving average. The metric is a solid momentum gauge and provided support during the early-to-mid February corrections. The upward-sloping white line marks short-term resistance, and NVIDIA corrected after tagging the trendline on Feb. 23.

However, the two combine to create a nice uptrend channel and higher highs will continue to materialize as long as NVIDIA trades above its 50-hour MA.

So, will the rich get richer, or did the recent surge mark peak AI optimism?


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