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Nvidia, a longtime Wall Street favorite, extended its rare decline as the artificial intelligence giant’s stock slipped into correction territory, even as Nvidia’s multitrillion-dollar peers posted solid profits. It’s a predicament in the midst of the good times.
Nvidia display in Shanghai.
CFOTO/Future Publishing (via Getty Images)
important facts
Nvidia stock fell 1.7% to $132 on Monday, its lowest closing price since October 15th.
This is 11% below the stock’s all-time closing high of $149 on November 7, and the stock is officially in a correction phase.
Monday’s decline bucked a broader rally in tech stocks, with the Nasdaq index rising 1.2% to a new record.
And the stock prices of the other six most valuable American companies (Apple, Amazon, Facebook parent Meta, Google parent Alphabet, other members of the Magnificent Seven group including Microsoft, Nvidia, and Tesla) are: Each led the way with an increase of at least 0.7%. Due to Tesla’s 6% rise.
big number
5.7%. That’s the biggest decline in Nvidia stock since Election Day, and far less than the S&P 500’s 5% gain during the period. The last six weeks have been strong for Nvidia’s tech giant, especially as the other Magnificent Seven stocks are all up at least 9.9%. There was no special trigger for Nvidia’s stock price decline. The company’s earnings report last month beat analysts’ expectations across the board, but the stock has previously fallen due to geopolitical concerns over Nvidia’s dependence on Taiwanese manufacturers.
Contra
While the recent decline in Nvidia stock may be difficult for investors to digest, especially in a rosy market, the company’s long-term returns are still impressive. Nvidia’s 170% year-to-date return is the highest among companies valued at more than $200 billion, and the stock has risen a whopping 700% over the past two years, according to FactSet data.
Main background
Nvidia has emerged over the past two years as the undisputed market leader in designing the semiconductor technology that powers generative AI, with its market capitalization reaching $3.6 trillion last month, up from less than $300 billion at the end of 2022. did. Nvidia, whose customers include Amazon and Microsoft, has translated increased interest in generative AI into a significant upturn in financial performance, with Nvidia’s most recent quarter revenue up more than 600% compared to the comparable period in 2022. Increased. Nvidia remains the world’s third-largest company by market value, behind Apple and Microsoft.
