Nvidia burst imminent? What lessons from Cisco's dot-com bubble teach about NVDA

Core Viewpoint - Nvidia's stock performance has raised concerns about its sustainability, drawing comparisons to the 2000 Dot-com bubble and Cisco's trajectory during that period [1][5][6]. Group 1: Historical Context - Cisco's stock price surged dramatically in early 2000, exceeding its established upward trend, indicating a potential correction [3]. - A significant bearish divergence was observed in Cisco's performance, where the stock price rose while key technical indicators like the Relative Strength Index (RSI) declined, signaling weakening momentum [3][4]. - The steep rise in Cisco's stock reflected a parabolic trend driven by speculative fervor, which is typically unsustainable [4]. Group 2: Lessons for Nvidia - Nvidia's current stock valuation is questioned as it trades well above its long-term trend, similar to Cisco's situation in 2000 [5]. - Technical indicators for Nvidia may also show warning signs, with a potential bearish divergence if the stock price continues to rise while indicators like RSI weaken [5]. - Nvidia's recent price action has been steep, mirroring the parabolic trend seen in Cisco's rise, suggesting that significant corrections may follow [5][6]. Group 3: Current Stock Analysis - Nvidia's stock recently experienced high volatility, dropping below $90 but recovering to trade at $124, above the $120 support zone [7]. - Insider trading activity shows a net sell-off, with 5,688,976 shares sold in the last three months, indicating potential caution among insiders [9]. - Despite the volatility, bullish sentiments remain, particularly with anticipated positive earnings results for Q2 2024 [9].