Nvidia(US:NVDA) Hua Er Jie Jian Wen·2025-07-18 12:12Core Viewpoint - Nvidia's stock price surged by 83% in less than four months, indicating potential overheating signals in the market, especially after a significant drop of over 20% following profit-taking by investors [1][4]. Group 1: Stock Performance and Market Sentiment - Nvidia's 14-day relative strength index (RSI) exceeded 80, marking the highest level since June 2024, suggesting extreme buying conditions [1][5]. - The stock has seen a continuous rise for eight weeks, adding approximately $1.9 trillion to its market capitalization since April's low, surpassing Meta's total market value [5]. - Nvidia's current market capitalization stands at over $4.2 trillion, leading Microsoft by about $400 billion [5]. Group 2: Key Drivers of Stock Surge - Key factors driving the recent surge include the U.S. approval for H20 chip sales to China and the upcoming launch of the RTX Pro graphics card [4]. - Analysts express caution regarding the extreme buying signals, with some indicating that the market sentiment has shifted from optimism to near-euphoria [5]. Group 3: Long-term Outlook and AI Demand - Despite concerns about technical overheating, Wall Street remains optimistic about Nvidia's future, with only one out of 79 analysts recommending a sell [6]. - Strong guidance from TSMC has bolstered confidence in ongoing AI demand, with major tech companies' earnings reports being closely monitored for capital expenditure insights [6]. - Significant investments in AI and energy infrastructure, including a $920 billion commitment announced by Trump, further support the positive outlook for Nvidia [6].