The AI token market has been ablaze with excitement following Nvidia’s stellar earnings report, propelling major tokens like NEAR, RNDR, and GRT to significant gains. Worldcoin (WLD) has particularly stood out, reaching all-time highs with a remarkable 260% rally in the last 30 days. In addition, there is a flurry of other factors that seem to have triggered the recent rally in the AI tokens.

But, amid this positive momentum in the AI tokens, concerns arise over a potential correction as investors brace for profit-taking after the recent surge.

AI Tokens Rally After Nvidia Earnings

The recent upbeat earnings by the tech giant, Nvidia, after the market close on February 21 have fuelled optimism of the investors. Notably, Nvidia has noted a significant surge in its revenue and earnings, mainly due to increasing demand from the AI space.

In other words, the firm’s Q4 FY24 earnings announcement, with a staggering revenue increase of 265% year-over-year (YoY) and 22% quarter-over-quarter (QoQ) to $22.1 billion, has been a major catalyst for the AI token rally. Besides, the chipmaker’s Data Center revenue, soaring 27% quarter-over-quarter or 409% year-over-year to $18.4 billion, underscored the growing demand for AI-related services.

In the last quarter, its earnings per diluted share under GAAP stood at $4.93, marking a 33% increase from the previous quarter and a remarkable 765% surge from the same period last year. On the other hand, its EPS on a non-GAAP basis reached $5.16, showing a 28% rise from the previous quarter and a substantial 486% increase from a year ago.

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Other Factors Behind The Rally

Apart from Nvidia’s robust earnings, several other factors might have triggered the recent rally in its price.

OpenAI’s Sora Launch: OpenAI’s recent launch of Sora AI, seems to have bolstered investor confidence, as witnessed by the unprecedented surge in WLD price. Notably, Sora AI’s revolutionary capability to generate video content from textual descriptions represents a significant leap in digital content creation, attracting attention and investment in the AI space.

Micorosft Billion Dollar Investment In AI: Microsoft’s $2.1 billion investment in AI expansion in Spain signals a significant move towards AI development, fueling investor optimism.

Vitalik Buterin’s Enthusiasm for AI in Crypto: Ethereum co-founder Vitalik Buterin’s endorsement of AI for code verification and bug detection boosts confidence in the digital asset sector. These might also helped in the recent rally in AI tokens.

Elon Musk’s Focus Into Tech Space: Elon Musk’s exploration of AI partnerships, like with Midjourney, hints at groundbreaking advancements in content creation, enhancing optimism in the AI sector.

Is a Correction Ahead?

Despite the bullish sentiment, concerns linger over a potential correction in AI token prices. Historically, after substantial rallies, cryptocurrencies often experience a pullback as investors seize profit-taking opportunities.

Given the recent exponential gains in AI tokens, investors are cautioned to exercise prudence and conduct thorough research before making investment decisions. As excitement mounts and prices soar, a correction could be on the horizon, highlighting the importance of vigilance in volatile markets.

Hence, although the AI token market basks in the glow of Nvidia’s earnings and technological advancements, a looming correction casts a shadow over the recent rally. As investors navigate the complexities of the market, prudent risk management and careful consideration of market dynamics will be essential to weather potential downturns and capitalize on future opportunities.

However, as of writing, the Near Protocol price was up over 2% to $3.27, while the Render price noted a surge of 17.72% over the last 24 hours to $7.25. On the other hand, the Graph price rose 19.86% to $0.282, with the Theta Network gaining nearly 7% to $1.23.

Also Read: Binance To Add WLD, HBAR, FIL, PENDLE Pairs, Will Prices Rally?

The post AI Tokens Rally After Nvidia Earnings, Is A Correction Ahead? appeared first on CoinGape.

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Filed under: News - @ January 1, 1970 12:00 am