Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

​NVIDIA's huge rally: is trouble ahead?

​​​​Is the NVIDIA share price rally sustainable?

NVIDIA Source: Adobe images

​​​NVIDIA's huge rally: is trouble ahead?

NVIDIA's stock has seen an extraordinary rally in 2024, with shares up over 150% year-to-date. This surge has propelled the company's market capitalization to $3.1 trillion, rivalling tech giants like Microsoft and Apple. The stock's performance has been driven by soaring demand for NVIDIA's graphics processing units (GPUs) in AI applications and a recent stock split.

​Reasons for outperformance:

  1. ​NVIDIA is benefiting from a shift towards accelerated computing in data centres for AI tasks.
  2. ​The company's financial performance has been impressive, with projected revenue growth of 2x this year to $111 billion.
  3. ​NVIDIA reported stellar net margins of 57% in the last quarter.

​Potential risks & challenges:

  1. ​Increasing competition from other chipmakers like Advanced Micro Devices (AMD) and Intel, who are investing heavily in AI-focused chips.
  2. ​Big tech companies developing their own AI chips, potentially reducing reliance on NVIDIA .
  3. ​The possibility that current high demand for GPUs may ease as AI deployments move from training to inference stages.
  4. ​Questions about the return on investment for massive AI infrastructure spending.

​Market Expectations vs. Reality

​While NVIDIA's current valuation (50x forward earnings) isn't unreasonable given its growth, there are concerns about the sustainability of its momentum. The market may be overly optimistic in extrapolating short-term trends, potentially overlooking long-term challenges.

​NVIDIA analyst ratings

​LSEG Data & Analytics data shows a consensus analyst rating of ‘buy’ for NVIDIA – 18 strong buy, 36 buy and 5 hold.

NVIDIA analyst rating chart Source: LSEG Data & Analytics
NVIDIA analyst rating chart Source: LSEG Data & Analytics

​NVIDIA share price – technical view

​​The NVIDIA share price, which is up 172% year-to-date, hit a record high at $140.76 in June and has been consolidating below this level since then.

​NVIDIA daily candlestick chart

NVIDIA chart Source: TradingView.com
NVIDIA chart Source: TradingView.com

​Over the past week, the NVIDIA share price has risen again and seems to be heading towards its June peak at $140.76. If overcome, the next psychological upside target would be the $150 region.

​While the 10 and 24 June and 1 July lows at $118.83 to $117.01 underpin on a daily chart closing basis, the short-term uptrend in the NVIDIA share price stays intact.

​Failure at $117.01 would lead to a medium-term top being formed, though, which could lead to the 55-day simple moving average (SMA) at $107.40 being revisited and perhaps also the psychological $100 region.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.

Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Tuesday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.