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Nvidia Faces 13% Slide in Three Days After Briefly Becoming Most Valuable Company
Nvidia, the chipmaker giant, has faced a significant decline in its stock value, dropping 13% over three consecutive trading days after briefly becoming the world's most valuable company last week. This downward trend has also impacted other tech firms associated with the artificial intelligence (AI) surge, which had previously shown substantial gains.
On Monday, Nvidia's shares plummeted 6.7%, marking the company's second-largest drop this year, with its stock falling to $118.11. This decline extended to other AI-related stocks, including Super Micro Computer, which experienced an 8.7% decline, and Dell, which saw a 5.2% drop. Additionally, chip designer Arm, as well as semiconductor giants Qualcomm and Broadcom, recorded declines of 5.8%, 5.5%, and 3.7%, respectively.
Despite this recent slump, Nvidia's value has nearly tripled over the past year. Last week, it briefly surpassed Apple and Microsoft to become the most valuable U.S. company with a market capitalization of $3 trillion before relinquishing some of these gains. On Monday, Nvidia ranked as the fourth-largest decliner in the S&P 500 index. Super Micro's stock, on the other hand, remains up by almost 200% in 2024.
Market analysts suggest that investors might be capitalizing on the recent market conditions to realize profits after a period of significant growth. Stephanie Link from Hightower expressed her views on CNBC, stating that Nvidia shares are excessively favored and that better risk/reward opportunities exist in other technology sectors.
Nvidia asserts that the demand for its AI graphics processing units (GPUs) remains robust, as major companies like Google, Oracle, and Meta continue to invest billions in these chips for their data centers and cloud services. The company is set to launch its next-generation AI chips, known as Blackwell, later this year, a move that analysts believe could spark another growth cycle for Nvidia and its partners.
Ray Wang, the founder of Constellation Research, anticipates that Nvidia's strong performance will persist for the next 18-24 months. On CNBC's Squawk Box, Wang suggested that the current dip presents a favorable buying opportunity for investors interested in Nvidia's long-term prospects.
Original Article: https://www.cnbc.com/2024/06/24/nvidia-slides-13percent-in-three-days-after-becoming-most-valuable-company.html
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