Nvidia Stock Forecast: NVDA Gains Following Arm Holdings IPO

Nvidia (NVDA) stock has gained 1.2% in Thursday’s premarket trading session, reaching just above $460. This increase is attributed to the general excitement surrounding the Arm Holdings (ARM) initial public offering (IPO). At the time of writing, NASDAQ futures have also added 0.5%.

Nvidia is among several notable tech giants, including Alphabet (GOOGL), Intel (INTC), and Advanced Micro Devices (AMD), that have purchased a stake in Arm Holdings. The IPO was priced on Wednesday and distributed to institutional investors, with trading commencing on Thursday.

The Arm Holdings IPO has garnered significant attention as the IPO market has been lackluster over the past 18 months following the COVID-19 pandemic. Arm’s offering was oversubscribed by around 10 times, indicating strong demand. Initially, investment banks believed it would take two days to sell all the shares, but they were distributed on the first day.

It is worth noting that Nvidia had previously expressed its intent to acquire Arm Holdings from its majority owner, Japan’s Softbank, for $40 billion three years ago. However, the deal fell through in 2022 due to regulatory concerns raised by multiple countries and competitors. Despite stagnating revenue and earnings, Arm’s estimated market share has increased from 42% to 49% since the beginning of 2021.

In other news, Nvidia’s General Manager and Vice President of Accelerated Computing, Ian Buck, attended the Bank of America Securities AI Conference. He discussed the heavy costs associated with large language models and stated that Nvidia is investing billions in research and development to optimize for generative AI. Buck emphasized that each generation of Nvidia’s GPU and other technologies increases performance and reduces training costs.

Nvidia is a leading designer of graphics processing units (GPUs) and is well-known for its CUDA API, which enables developers to create software for various industries. The company’s chips are widely used in data centers, supercomputing, and artificial intelligence applications.

Nvidia’s market cap reached $1 trillion in May 2023, largely driven by anticipation for its ninth-generation data center GPU, the H100. This GPU is specifically designed for artificial intelligence applications and is expected to play a significant role in the upcoming AI revolution.

CEO Jensen Huang is revered in Silicon Valley and on Wall Street for his visionary leadership and determination to build Nvidia into a leading company. Despite facing challenges, Huang’s strategic bets on new technologies have propelled the company’s success.

In terms of the stock forecast, Nvidia’s stock is currently trading below both the 9-day and 21-day Simple Moving Averages (SMA), indicating a downtrend rotation. Any significant sell-off could push the shares lower.

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