| PROSPERITY PUB MARKET TALK
The Bigger They Are, The Harder They Fall?
Nvidia (NVDA) has been the market darling of 2024, enjoying a meteoric rise that saw its stock price virtually skyrocket all year since January.
This climb has been so significant that Nvidia's market cap even surpassed the individual stock market values of Germany and France, reaching unprecedented heights.
After its stock price split 2 weeks ago, it also sailed clear past Microsoft (MSFT) and Apple (APPL) to become the largest company in the world by market cap, a position it only held for a couple of days.
That’s because despite its phenomenal performance, it’s since experienced a sharp correction.
Many have been warning of a potential bubble reminiscent of the DotCom bubble of the early 2000s. So far, Nvidia has defied these warnings and continued its upward trajectory, bolstered by strong earnings reports and a surge in AI-related investments.
Notably, Nvidia recently performed a 10-for-1 stock split, reducing its price from an astronomical $1,200+ per share to a more accessible $120 per share.
Following the split, Nvidia's stock continued to climb, peaking at nearly $141 per share. But the past three trading sessions have been challenging, with Nvidia experiencing a significant downturn.
The stock has shed almost 15% of its value from its peak of $141.09, falling into correction territory and losing all the gains it had made post-split
This scenario echoes the warnings issued by our own Jeffry Turnmire back as early as February.
Jeffry highlighted the possibility of a bubble, comparing Nvidia's rapid ascent to the infamous DotCom bubble, where companies like Cisco (CSCO) saw dramatic rises followed by equally dramatic crashes.
Jeffry frequently references the following "psychology of market bubbles" chart to illustrate his point, suggesting that Nvidia's current trading action could be indicative of a similar pattern.
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