🦉 Is NVIDIA Stock Done Playing With the Market? Buy, Sell, or Hold
byDaljit Kalsi-
There is no other sector in the stock market today like the technology sector. Inside that space, no company comes close to replacing shares of NVIDIA Co. (NASDAQ: NVDA). Companies that took decades to earn their place in the NASDAQ have now been blown past by NVIDIA’s quick rise to fame, as Microsoft Co. (NASDAQ: MSFT) and even Alphabet Inc. (NASDAQ: GOOGL) have fallen below NVIDIA in market capitalization. Today, NVIDIA is worth up to $3.1 trillion, with a high last week at $3.3 trillion. In comparison, Google is worth only $2.2 trillion, while Microsoft is at the top of the list at $3.3 trillion. .
Equity markets managed to edge higher on Tuesday, but the S&P 500 looks extended trading near fresh highs. With the PCE price index due Friday, there is a risk the market will peak and begin to pull back soon. The PCE price index is expected to cool but not to the point the FOMC will cut rates at the next meeting. The risk is that inflation will be hotter than expected, and the timeline for when the FOMC will cut rates will be extended.
The depth of the upcoming and overdue correction will depend on the outlook for S&P 500 earnings. If the outlook for earnings remains steady, the market should rebound quickly and extend the rally to new highs. If not, the market risks becoming range-bound or reversing into a bear market. Until then, economic data, the FOMC, and interest rates are bricks in a wall of worry growing taller.
There is no other sector in the stock market today like the technology sector. Inside that space, no company comes close to replacing shares of NVIDIA Co. (NASDAQ: NVDA). Companies that took decades to earn their place in the NASDAQ have now been blown past by NVIDIA’s quick rise to fame, as Microsoft Co. (NASDAQ: MSFT) and even Alphabet Inc. (NASDAQ: GOOGL) have fallen below NVIDIA in market capitalization. Today, NVIDIA is worth up to $3.1 trillion, with a high last week at $3.3 trillion. In comparison, Google is worth only $2.2 trillion, while Microsoft is at the top of the list at $3.3 trillion.
Nvidia shares rebounded Tuesday, halting a three-day skid that had surprised many investors and wiped away more than $400 billion in market value. Early last week, Nvidia overtook Microsoft as Wall Street's most valuable public company. Then it fell 13% over three days, its worst such stretch since 2022. Because Nvidia has become so massive in size, the movements for its stock carry extra weight on the S&P 500 and other indexes.Any stock that climbs as much as Nvidia has — up more than 1,000% since the autumn of 2022 — is vulnerable to some of its investors selling shares in order to lock in some profits.
The Night Owl is an evening newsletter published by The Early Bird and powered by MarketBeat. The Night Owl covers top stories on the stock market and outlook on interesting stocks. If you give a hoot about the market, read your copy every Tuesday, Thursday, and Sunday evening.
MarketBeat Media, LLC 345 N Reid Place, Suite 620, Sioux Falls, SD 57103. contact@marketbeat.com
