Introduction: Nvidia has been the darling of US equity market investors for past 1 year. The stock had climbed almost 200% in the past year alone. But the same break neck ascent now exposes itself to a time bound correction. Shares of the semiconductor giant have fallen 6.7% between 20-21 June, erasing over $220 billion in market capitalization and dragging the company from its place as the world’s top stock. Nvidia’s market cap was about $3.1 trillion on 21st June, lower than Apple Inc. at $3.2 trillion and Microsoft Corp. at $3.3 trillion.
It was a swift reversal from earlier in the week, when Nvidia rallied to overtake its mega cap peers and claim the pole position. There were no fundamental reasons behind the two-day selloff at the end of the week, but it does underscore the breakneck pace at which the stock had climbed.
Current Market Positioning: Currently Nvidia is trading around 126 levels which is still significantly over bought compared to it’s one year before price of 42 levels. We believe most of the future earnings growth as well as over all expansion of the global AI business is already baked into Nvidia’s price.
For detailed trade recommendation report, please read the below report in our trade recommendation section:
https://macro-spectrum.com/trade-recommendation/short-nvidia
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