Yahoo Finance Nvidia stock is through the roof — Here's how to manage a potential correction
Investing.com - Nvidia (NASDAQ:NVDA) shares are skyrocketing. In just two days, the tech company's stock has risen more than 10%, and its market value has surged by approximately $243.376 billion, surpassing $2.5 trillion and solidifying its position as the third most valuable company on Wall Street.
This surge follows the release of an impressive quarterly report, the announcement of a dividend increase, and a stock split, all of which have propelled the stock upward. The outlook remains positive due to the strong demand for AI processors.
But beware! With this explosive rise, the stock could be in overbought territory and somewhat overvalued. Additionally, there are risks of significant drops due to external factors such as a cooling demand or trade blockades, which could intensify if Donald Trump is elected in the upcoming U.S. presidential elections.
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InvestingPro's AI has identified Nvidia's potential early on and has included it in two of the ProPicks strategies: "Beat the S&P 500" and "Tech Titans."
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This calculation is obtained through a process known as backtesting, which evaluates the past performance and risk characteristics of a trading strategy using historical market data. Traders use backtesting to simulate how a particular trading strategy would have performed in the past, given specific rules and parameters.
If your interest in Nvidia is tech-focused, InvestingPro's AI has also included it in the "Tech Titans" strategy.
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This gives Tech Titans an annualized return of 28.4%, also exceeding the S&P 500's 11.7% and the Nasdaq Composite's 15.7%.
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