Magnificent Seven stocks like Nvidia and Microsoft continue to lead the explosive artificial-intelligence boom. But fintech firm Tradeweb Markets continues to bring next generation AI solutions to trading in the stock market, which has TW stock set to unleash a new breakout.
As both companies show strength to kick off 2024, Tradeweb and Nvidia each earn a spot on the IBD Breakout Stocks Index, which is updated weekly.
Through its high-speed graphics processing units, or GPUs, Nvidia is no stranger to algorithmic trading. It helps streamline intelligent trading with GPUs able to handle a continuous stream of data that informs market conditions.
Tradeweb, a builder and operator of electronic marketplaces, has seen a number of hedge funds increasingly incorporate Tradeweb's Automated Intelligent Execution (AiEX) tool into their systemic trading systems.
Originally conceived as an efficiency tool to free up traders' time by automating low-touch tickets, AiEX has evolved in new areas. It is now deployed by some of the world's most sophisticated traders. Tradeweb says the technology is creating entirely new avenues of trading across various asset classes and trading environments.
Clients leverage Tradeweb's click-to-trade protocol within AiEX. That allows them to determine when, at what level and with whom to execute their trade. AiEX enables that while creating a minimal market footprint.
See Who Joins Tradeweb And Nvidia On The IBD Breakout Stocks Index
Fintech, AI Drive Demand For Tradeweb
Founded in 1998, Tradeweb has processed over $2.3 quadrillion worth of trades as of Q3 2023. (A quadrillion is one followed by 15 zeros.)
The New York-based fintech firm operates across three core areas: institutional (Tradeweb), wholesale (Dealerweb) and retail (Tradeweb Direct).
While Tradeweb did not join industry peers Broadridge Financial Solutions and Tiptree on this month's list of new buys by the best mutual funds, institutional investors have shown demand for TW stock.
It sports a solid 1.2 up/down volume ratio, behind the 1.7 score for Nvidia stock. Any number over 1.0 points to demand.
In a further sign of demand, Tradeweb earns a B- Accumulation/Distribution Rating, as 36 funds with an A+ or A rating own shares in TW stock.
Both of these high-power growth stocks score in the top 5% of all companies, with Tradeweb's 96 Composite Rating and Nvidia landing the highest-possible 99.
Tradeweb Sets Up As Nvidia Stock Breaks Out
Shaking off some initial pressure at the start of the new year, Nvidia stock has blasted beyond a new buy zone. NVDA is now extended after breaking out past a 505.48 entry in a flat base. The stock has now posted five straight up days, the last three in particularly strong volume.
TW stock aims to join the AI party. The fintech firm continues to work on an early stage flat base showing a 97.18 buy point.
On Jan. 4, Tradeweb popped back above its 50-day moving average in heavy volume. In another indicator of improving technical strength, its 21-day exponential moving average stands on the verge of moving above its 50-day line.
But compared to the spike in the relative strength line for Nvidia, the RS line for Tradeweb still needs some work. Look for the relative strength line to perk up as a potential breakout for TW stock nears.
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Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
