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Nvidia hits $3 trillion market cap, triggering AI token sell-off
Nvidia Inc. has reached the $3 trillion market capitalization mark, effectively surpassing Apple.
Meanwhile, the price of AI tokens is declining alongside a 10% increase in trading volume, typical of a “buy the rumor, sell the news” situation.
Nvidia surpasses Apple with a market capitalization of $3 trillion
Chip manufacturing giant Nvidia has reached a market capitalization of 3 trillion and data shows it was one of the most traded stocks during the latest trading session, second only to GameStop’s GME. This comes after the chipmaker’s 10-for-1 split, which would allow company employees and retail investors to make purchases NVDA shares easily and at cheaper rates.
“NVIDIA surpasses the $3 trillion market cap and is now worth $102 million per employee,” cryptocurrency tracking tool Radar pointed out in a send.
Data shows that NVDA shares are now worth five times more than Apple Inc. (AAPL) shares. Immediately following the split, NVDA rose to $120 per share before falling to its current price of $102.
To know more: AI Stocks: The Best AI Companies to Know in 2024
NVDA after 10:1 split: Source: RadarHits
Only recently, Nvidia Corp beat the Russell 2000 Index from a range of $10 billion, recording volume up to $45.94 billion on June 3. This comes despite the US Department of Commerce’s recent move to impose new restrictions on export AI processors to several countries in the Middle East. These measures aim to address safety concerns, particularly the risk of high-performance chips being resold to China.
“With respect to cutting-edge technologies, we conduct extensive due diligence through an interagency process, carefully reviewing license applications from applicants who intend to ship these advanced technologies around the world,” the Commerce Department announcement states .
NVDA shares suffered in late May as a result of this decision, as chipmakers AMD and Nvidia struggled to secure export approvals for AI accelerators amid slowing licensing. Prior to this news, there was general speculation that crypto tokens tied to AI and big data would rally, especially if NVDA outperformed AAPL. This expectation arose from the positive correlation between AI tokens and past events involving the GPU giant and its stock price.
AI tokens are seeing increasing trading volume
Anticipation for Nvidia Corp’s 10:1 split has sparked interest Cryptocurrencies linked to artificial intelligence as market watchers speculated on potential impacts. Among them, the price of Render (RNDR) rose 5% on Sunday, from a low of $8,921 to a high of $9,262. Likewise, Close to the protocol (NEAR) rose 3%, while Injective (INJ) price exploded 10% to an intraday high of $29.31.
The surge was a typical “buy the rumor” situation and in a typical “sell the event” reaction, these tokens collapsed. AI Crypto Coins Trading Volume Increased by 10% to Show Huge Profits. With this, the market capitalization of AI cryptocurrencies fell by almost 3% to $34.8 billion.
To know more: Top 9 Artificial Intelligence (AI) Cryptocurrencies in 2024
The saying “buy the rumor, sell the news” is a contrarian trading strategy based on predictions of expected market reactions to rumors, events, or news announcements. Investors try to take advantage of price movements by acting before the masses widely disseminate and process the information (rumors). The strategy works in such a way that when rumors emerge regarding a particular event that could have a positive impact on the price of the asset, enlightened traders can purchase the asset based on the speculation (rumor).
A sell-off occurs when the news arrives, provided the market has already priced in the expected event. This allows enlightened people (early investors) to make profits.
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