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Nvidia is 'in a league of its own,' BTIG says

Published 06/24/2024, 04:50 AM
© Reuters

Nvidia (NASDAQ:NVDA) stock is in “a league of its own,” BTIG analysts said in a note released Sunday.

The chipmaker’s shares have recently traded approximately 100% above its 200-day moving average (DMA). According to BTIG, this is unprecedented, as the widest spread any U.S. company has ever traded above its 200 DMA while holding the position of the largest company was 80%, achieved by Cisco (NASDAQ:CSCO) in March 2000, marking its all-time high.

Just like NVDA this time, Cisco also briefly surpassed Microsoft (NASDAQ:MSFT) in March 2000 to become the world’s most valuable company.

“While we fully recognize the fundamentals are much different this time around, in the last five years, NVDA is +4,280% compared to CSCO's +4,460% gain in the five years leading up to its peak,” BTIG analysts highlighted.

“Over the last 18 months, NVDA is +827% which is actually double that of CSCO's 18-month gain into '00,” they continued.

More broadly, there have been significant inflows into large-cap tech and growth funds, suggesting a potential market froth following the recent run, BTIG noted.

Looking ahead, the investment firm said it remains concerned about a potential near-term unwind of many year-to-date leaders. However, they also note that within the Magnificent 7, group, there is some dispersion, with stocks like Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL) still appearing constructive and not overly stretched.

“If the SPX is going to avoid a bigger pullback into July, bulls need to see continued rotation below the surface,” analysts concluded.

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