Nvidia Splitting 10 For 1
All eyes are on what price Nvidia's ($NVDA) stock will split at this week. I suspect the price will be north of $1100 but the last two trading days in May pushed the price below that level. That appears to have been a temporary blip because pre-market action this morning is pointing a significant higher open for NVDA and back over $1100.
The 10: 1 stock split will happen June 4th and I expect the share price to make a run for the $500 level pronto. This is where the retail investor, the ones that can't afford 100 shares at $1100, will jump in. Do I expect some profit taking? Of course, but for the most part I suspect the price to go from $110/share (assumed price after split) to $200/share fast. Then it's just a matter of time before we get back to $500.
What gives with this price action euphoria anyway? Why is everyone raging about NVDA instead of some other company? Isn't this euphoria dangerous? Yes, we're entering a manic phase that will end up in tears... one day.
The market is euphoric because NVDA is the only AI company that has been able to figure out how to cash in on AI. They're selling the pick and shovels to all the AI startups and companies that are trying to ride the AI and GenAI wave.
Then, one day, when euphoria begins to cool and VCs wonder where all their money went, the market will correct and quickly. The question is when will this happen, not will it happen at all?
That's the million dollar question, when will the correction happen? I wish I knew. In the mean time we can trend trade this bad boy, use our stops, and take profits along the way. Always remember, there's nothing wrong with taking profit. It's your #1 job not to become a bag holder.
Disclosure: Long NVDA