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NVIDIA Corp Stock Movement

NVIDIA Corp Stock Movement

Last week was somewhat confusing for investors in Nvidia. Known as a powerhouse in AI and accelerated computing, Nvidia, founded in 1993, only came into the public eye about a decade ago. Recently, Nvidia has experienced exponential growth. For example, their 2011 acquisition of Icera, a baseband chip-making company, significantly boosted their profits. Such proactive actions have been rewarded with a substantial increase in their share price: +205% in the last year and +1,207% in the last 5 years.

After gaining a market cap of $1.18 trillion, Nvidia has rightly earned its place among the ‘Magnificent 7’ of the S&P 500. Earlier this week, Nvidia hit an all-time high of $504.57 per share, in anticipation of the new earnings report. The results were impressive; Nvidia’s revenue was up 34% from last quarter and 206% from a year ago.

Typically, a good earnings report leads to a spike in share price, but not this time. On November 22nd, the share price opened at $496.9 and dropped to $477.7 a share before improving. Overall, for the week, the share price is down 1.7%.

The drop in share price can be attributed to several factors:

  • Caution/scepticism about continued sales in China, especially following the meeting between President Biden and Xi Jinping.
  • A market correction following the hype of reaching all-time highs.
  • A lawsuit from Valeo claiming ‘brazen theft’ of their source code, data, and trade secrets, supported by screenshot evidence.

What does the future hold for Nvidia?

There doesn’t seem to be much cause for concern; Nvidia continues to make increased profits. They are getting closer to more realistic P/E ratio, which decreased from 144.5 in April 2023 to 63.03 now. The share price currently sits at $482.42, and it’s expected that they will surpass $500 per share again, with some analysts even predicting they could reach over $600 within the next year.

The above is for educational purposes only and does not constitute advice. You should always contact your advisor for a personal consultation. 

* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above. 

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