Nvidia Stock in Risk of Bear Market after Reversal from Record Peak
Nvidia Stock Analysis
Nvidia reaps the benefits of its leading work on generative Artificial Intelligence (AI), since its GPUs are the go-to solution for training and inference of large language models. As a result, the company has seen staggering growth in its top and bottom lines over the past several quarters, with its sales up more than 260% in the last one (Q1 FY25) [1]. Executives expect continued growth opportunities and its CEO recently touted a one-year rhythm [2], as the firm accelerates its new AI infrastructure cadence to meet the demands of the industry.
The company briefly surpassed Microsoft as the most valuable company last week and has now overtaken Apple, to become the second largest holding of the Technology SPRD ETF (XLK.us) [3]. The stock reached new record highs last week and gains nearly 140% year-to-date.
However, NVDA.us has entered correction territory due to a sharp pullback over the last few days and is now is risk of a bear market, generally considered as a 20% loss from a recent peak. There are concerns of possible AI-fatigue and there is also the issue of how do you land the ship once the eye-watering revenue growth slows. Executives expects another astounding expansion in excess of 100% y/y in the current quarter, but that would be a substantial slowdown from the last report.
On the other hand, the AI revolution seems unstoppable and Apple's entry into the arena has reinvigorated the optimism. Furthermore, Nvidia is far ahead than its competitors, has constantly defied expectations and sees continued growth ahead. NVDA.us had entered bear territory at the start of the quarter, but that was short-lived, as it quickly rebounded and set new all-time highs. Although an even deeper slide would not be surprising, the correction seems more like a cyclical thing and the firm's AI advances can fuel new records.
Source: www.tradingview.com
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 25 Jun 2024 https://investor.nvidia.com/financial-info/financial-reports/default.aspx | |
| Retrieved 25 Jun 2024 https://blogs.nvidia.com/blog/temp-computex-2024-jensen-huang/ | |
| Retrieved 16 May 2026 https://www.ssga.com/us/en/intermediary/etfs/funds/the-technology-select-sector-spdr-fund-xlk |
These materials constitute marketing communication and do not take into consideration your personal circumstances, investment experience or current financial situation. The content is provided as general market commentary and should not be construed as containing any type of investment advice, investment recommendation and/or a solicitation for any investment transactions. This market communication does not imply or impose an obligation on you to perform an investment transaction and/or purchase investment products or services. These materials have not been prepared in accordance with legal requirements designed to promote the independence of investment research and are not subject to any prohibition on dealing ahead of the dissemination of investment research.
FXCM, and any of its Affiliates, shall not in any way be liable to you for any inaccuracies, errors or omissions, regardless of cause, in the content of these materials, or for any damages (whether direct or indirect) which may arise from the use of such materials, services and their content. Consequently, any person acting on them does so entirely at their own risk. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.