In the first week of 2024, U.S. stock market indices have pulled back, with investors taking some profits following a super charged rally in the last quarter of 2023. Awaiting signals from the Federal Reserve regarding potential start and amount of interest rate cuts in 2024, Wall Street took a breather ahead of the crucial CPI report which will be released on Thursday.

The tech-heavy Nasdaq-100 index has experienced a nearly 5% decline in 2024, impacting notable companies like NVIDIA, which had seen a remarkable threefold increase in its stock value in 2023 due to the success of its artificial intelligence (AI) chips.

At the 2024 Consumer Electronics Show (CES), NVIDIA unveiled a number of new graphic processing units (GPUs), AI software and tools aimed at both developers and users. This strategic move aligns with the company’s vision to become a leading hardware/software player in the AI space.

Shares of NVIDIA have been rising over the past four days with Mondays’ price action rallying more than 6% and clearing the resistance of the four-month trading range of $505.48. The breakout occurred amid retreat in treasury yields, news of more affordable AI chips for China, and the start of SEC.

Source: TradingView

The stock’s impulsive breakout above key resistance is a bullish development and shows that momentum remains firm, and the price is likely to trade higher in the short to medium-term. The potential upside price target based on the breakout is in the range between $580 and $600.

With a market capitalization surpassing $1.33 trillion, Nvidia stands out as the largest semiconductor stock globally, drawing significant investor interest as it is perceived as one of the most promising growth opportunities in 2024. Macro tailwinds, including anticipated interest rate cuts and growth catalysts to focus on this year.

Growth investors remain attracted to NVIDIA stock considering how fast the market for AI GPUs is anticipated to grow in 2024 and beyond. With AI becoming increasingly popular across various applications, the demand for more powerful hardware to support these capabilities is growing.

As the demand for powerful hardware to support AI applications intensifies, Nvidia’s tailored chips position the company to tap into the growing market of generative AI apps on PCs. The industry’s increasing reliance on AI-centric computing aligns with Nvidia’s forward-thinking approach, establishing the company as a key player.