Shares of RedCloud Holdings (RCT) are heading south after surging yesterday due to investor reaction to the company joining the NVIDIA (NVDA) Connect program. The partnership aims to accelerate RedCloud’s product development and strengthen its AI-powered trading platform. Following the announcement, RCT stock jumped 65% on Wednesday but dropped around 11% in pre-market trading on Thursday, showing high volatility.
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For context, the NVIDIA Connect program is an initiative by Nvidia to partner with companies and startups that leverage its AI, GPU, and computing technologies.
RedCloud to Tackle Trillion-Dollar Trade Challenge
RedCloud creates AI-based trading tools to improve supply chains for fast-moving consumer goods (FMCG). With this partnership, the company aims to help close a $2 trillion inventory gap in the $14.6 trillion global FMCG market.
Through the NVIDIA Connect program, RedCloud will gain access to AI software, development tools, and expert guidance to accelerate product development. The partnership will strengthen RedCloud’s RedAI trading platform, Red101 retailer app, and TradeX bulk trading system.
What Lies Ahead for RCT Stock?
It’s not unusual for companies to see a big jump when they announce that they are joining Nvidia’s program. However, most of these gains didn’t last. For example, AI-driven brain analytics company Firefly Neuroscience (AIFF) saw a sharp spike earlier this year after joining the NVIDIA Connect program. However, the boost was short-lived, and the stock quickly fell back to its previous levels, showing that such gains are often temporary.
Moreover, a skeptic might note that joining the NVIDIA Connect program is fairly easy, almost like applying for a credit card. According to Nvidia, companies just need to provide at least two corporate email contacts, have a working website, be officially incorporated, and agree to the program’s terms. There are no application or membership fees.
So, while RedCloud’s partnership is a positive development, the stock’s large spike may be mostly driven by short-term hype rather than a lasting fundamental change. Investors should be cautious and avoid assuming that the gains will continue.
Is RCT a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on RCT stock based on one Buy assigned in the past three months. Furthermore, the RedCloud’s stock price target of $5.0 per share implies an upside of 197.6% from current levels.
