Can a day the market closes stop NVIDIA‘s (Nasdaq: NVDA) rally? Apparently not.
With U.S. markets closed for Juneteenth, NVIDIA still soared in European trading. Let’s look at today’s price activity and why global price discrepancies in AI stocks are becoming more common.
NVIDIA Rises in Frankfurt
As some traders on Twitter (now X) noticed, even though U.S. markets were closed, NVIDIA’s shares in Frankfurt had quite the day, finishing up more than 4%.
$NVDA closed today in Frankfurt at $139.92 so big gapup coming, bears can’t even get a break when market is closed.
— Tom (@TradingThomas3) June 19, 2024
If you direct yourself to Yahoo Finance you will find NVIDIA’s Frankfurt-listed shares did end the day up 4.16%. Just remember these shares trade in Euros, so you’ll need to adjust the price from Euros to dollars.
One question on your mind might be whether this means NVIDIA shares are destined for a good day on Thursday. Well, recent history would say they probably are. Yet, it’s important to note NVIDIA’s shares in Frankfurt are much more lightly traded.
About $169 million in NVIDIA shares traded hands in Frankfurt on Wednesday. That might sound like a lot but it’s only about 1/300th the recent average volume of NVIDIA’s Nasdaq-listed shares!
After hours on June 18th, NVIDIA last traded up .6% to $136.40.
International Price Differences Are Common in AI Stocks
We’ll see whether NVIDIA opens up a similar amount to today’s trading in Frankfurt, but it is worth noting that some AI stocks have begun trading for price discrepancies across markets.
As you’ll see below, my former colleague Eric Jhonsa recently noted that Taiwan Semiconductor (NYSE: TSM) shares trade for an astounding 18% less in Taipei.
A 5-year chart comparing $TSM‘s performance with 2330’s is interesting. The former has often traded at a healthy premium to the latter when animal spirits are strong, but has tended to give up that premium when investors turn more cautious/bearish. pic.twitter.com/JVcK3wWaTx
— Eric Jhonsa (@EricJhonsa) June 18, 2024
As you can see, when this gap has opened up in the value of Taiwan Semiconductor shares, it’s generally closed when the stock begins performing worse.
Other areas where price differences are emerging in AI stocks could be seen in the memory market. For example, SK Hynix trades for much cheaper levels compared to Micron (Nasdaq: MU), despite it having deep relationships with NVIDIA in the booming High Bandwidth Memory (HBM) market.
One likely reason? SK Hynix is traded primarily in South Korea, a market that’s traditionally been difficult for foreign investors to access. If you’re looking to take advantage of some of these international pricing opportunities, your best bet remains creating an account with Interactive Brokers.
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