Shares of the Santa Clara, California-based company have climbed 22% during their latest surge, adding about $220 billion in market value, according to data compiled by Bloomberg. This has propelled their relative strength index, a 0-100 gauge of bullish and bearish price momentum, above 70 on Tuesday.
Such an elevated RSI level is generally considered a contrarian signal that a decline is imminent, because buying has gotten excessive. The stock entered so-called overbought territory for the first time since July.
The latest surge comes as technology stocks rebound amid cooling inflation and hopes that Federal Reserve interest rates have peaked. Nvidia also got an added boost as the company announced an update on its artificial intelligence processors. “Nvidia’s story remains stronger than ever,” CFRA Research senior equity analyst Angelo Zino said. Zino notes that the faster-than-expected release of new chip reflects company’s desire to fend off competition.
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