Last week, Nvidia witnessed a significant surge in its shares, experiencing a nearly 25% increase on Thursday. This surge was primarily driven by optimistic market sentiment surrounding the potential for substantial gains resulting from advancements in artificial intelligence technology. Nvidia itself expressed its expectation of generating $11 billion in the next quarter, which represents a remarkable increase of over 50% compared to the previously estimated figure of $7.2 billion. As a result of this impressive performance, Nvidia’s market capitalization now exceeds 2.6% of the entire S&P500 index.

The possibilities presented by AI are vast and hold tremendous promise. However, at this stage, investors are uncertain about the precise magnitude of the benefits they will reap and the specific entities that will capitalize on them. Furthermore, the full extent of potential risks associated with AI remains not yet fully comprehended.

Consequently, it remains uncertain whether Nvidia’s recent surge will be sustained in the long term. Exploring seasonal patterns and their potential impact on Nvidia’s performance may provide valuable insights to help assess any underlying trends and dynamics within the company’s operations.

Interestingly, the next coming period shows seasonal weakness ahead. From June 1 to July 5 Nvidia has seen average falls in stock prices of over 5%. The largest fall was over 45% in 2008 and the largest gain was 38% in 2021. So, will Nvidia’s gap in price be filled with a retracement?

Major Trade Risks: The biggest risk here is whether or not Nvidia can maintain its market position. Also, broader risk sentiment is key here too.

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