Can Nvidia’s Surge Spark an AI Token Boom?
Nvidia reached an all-time high yesterday while other assets experienced capital outflows in the market. This surge followed the company’s better-than-expected first-quarter earnings for 2024, with revenues soaring to $26 billion, marking an 18% increase over the past three months.
Nvidia’s robust performance has driven a 262% year-over-year revenue increase, fueled by the growing demand for artificial intelligence (AI) chips. The stock price surged 6% within hours of the announcement, continuing to reach new highs thereafter.
Despite Nvidia’s gains, the broader U.S. stock market has seen a downturn over the past 24 hours due to plummeting market sentiment. Meta’s stock traded at $465, down 0.43%, while Coinbase and MicroStrategy saw declines of 5.46% and 6.25%, respectively. Bitcoin (BTC) mining stocks also plummeted as hopes for a market rebound waned.
In the wake of Nvidia’s promising earnings, cryptocurrency users anticipate a potential rise in AI and large tech tokens. This aligns with a recent trend in most tech stocks. AI tokens initially rose 2% in the hours following Nvidia’s announcement but soon retracted due to broader market sentiment.
Over the past 24 hours, AI tokens have declined by 4.3%, with top assets taking significant hits. Render (RNDR) fell by 4%, and The Graph (GRT) dropped by 5%. This outflow of capital has erased some of the gains made by AI tokens in the market. While there were slight recoveries during intraday trading, bearish trends driven by negative macroeconomic factors have dominated the landscape.
However, some cryptocurrency enthusiasts believe Nvidia’s stock, which recently surpassed the $1,000 mark, could continue to rise, potentially boosting related AI tokens.
This week, most crypto stocks and traditional tech stocks have experienced declines. Crypto stocks are companies whose value is influenced by Bitcoin, altcoins, or blockchain technology. The anticipated approval of a spot Ethereum ETF by the U.S. Securities and Exchange Commission (SEC) is expected to bring new capital into digital assets.
Spot ETF sentiment soared above 50% this week, with Ethereum jumping by 28%.
