Nvidia Becomes World's Most Valuable Company

According to the NVDA chart today, the share price rose yesterday to a new all-time high, surpassing $135 (after a 10-to-1 split). This pushed Nvidia's market capitalisation to $3.34 trillion, overtaking Microsoft, which is currently valued at $3.32 trillion.

As CNBC reports:
→ Nvidia shares have risen by more than 170% this year, with a strong driver being the first-quarter earnings report released in May.
→ Since the end of 2022, the shares have increased more than ninefold, driven by the emergence of generative artificial intelligence.
→ Nvidia holds around 80% of the AI chip market used in data centres, with this business expanding thanks to purchases by OpenAI, Microsoft, Alphabet, Amazon, and Meta.

What are the prospects for NVDA's share price? Will the company be able to maintain its status as the most valuable company, a title that has traditionally belonged to either Apple or Microsoft?

Technical analysis of the NVDA chart shows that:
→ The price is moving within an ascending channel (shown in blue);
→ In mid-May, the price found temporary balance along the median line of the blue channel;
→ But then, following the positive wave from the 22nd May report, the NVDA price soared to the upper boundary of the channel, forming a trajectory highlighted by the green trend line.

In fact, with such a channel construction, the market is in an overbought state. This thesis is confirmed by the RSI indicator (where signs of divergence are noticeable).

Therefore, it is reasonable to assume that the price is in a position vulnerable to correction. Although the extremely strong fundamental background related to AI is unlikely to contribute to a deep correction (if it occurs).

According to TipRanks, the average price target for NVDA, as forecasted by Wall Street analysts, is $130.29 (approximately 3% below current levels) over the next 12 months. This could indicate that NVDA's price already fully reflects all bullish factors, making the prospects for further growth uncertain.