Hello Finance Buddies! Have you ever heard about Nvidia? Yep, Nvidia (NVDA) is a well-known technology company famous for designing and manufacturing Graphics Processing Units (GPUs). They’re also a significant player in the AI chip market.
According to CNN, amid the rise of Artificial Intelligence, Nvidia is said to be fueling the AI revolution. On June 18, 2024, the chipmaking giant’s market capitalization hit $3.34 trillion, surpassing Microsoft to become the world’s most valuable company. However, over three trading days two weeks ago, this company lost $430 billion in market value.
The frenzy around AI’s potential to transform how we live and work—and to generate substantial returns for investors—has driven much of the stock market’s performance over the past year and a half. Nvidia is part of the “Magnificent Seven,” a group of mega-cap tech companies that outperformed the broader US stock market last year. The S&P 500 index climbed 24.2% in 2023, while the stocks of the Magnificent Seven soared by more than 100% on average.
Nvidia’s Stock Fell Last Week
Nvidia remained in the spotlight last week as its shares continued to fall from the record high reached the previous week. According to Investopedia, Nvidia shares fell 6.7% on Monday, closing at $118.11. This marks a 16% drop from its all-time intraday high of $140.76 set on Thursday, June 20, 2024.
What’s Behind the Drop?
According to Forbes, the Nvidia selloff didn’t have an obvious trigger, suggesting it was probably due to investors taking profits following the stock’s 170% increase this year.
Jochen Stanzl, chief market analyst at CMC Markets, explained to CNN that the volatility in Nvidia’s stock is typical for a company that has risen as rapidly as Nvidia has. The stock has soared more than 161% since January. Nvidia’s chips power many AI systems, including generative AI like OpenAI’s ChatGPT, which can create text, images, and other media.
Nvidia’s Stock Rebounds
Nvidia’s stock staged a comeback on Tuesday last week after a multi-day sell-off that cost the US chipmaker its crown as the world’s most valuable public company. On Tuesday, Nvidia closed nearly 7% higher, reversing course after three straight days of declines. This caused some investors to worry that the excitement over Nvidia’s crucial role in the AI revolution might be cooling off.
Despite the rally, Nvidia’s market cap now stands at $3.10 trillion, placing it in third place behind Microsoft ($3.35 trillion) and Apple ($3.21 trillion).
So, Finance Buddies, that’s the latest on Nvidia’s stock rebound. Do you want to keep getting the latest updates in the financial world like this? Keep an eye on the Invlinic blog! There will be more information about financial planning, investment, trading, and the latest updates in the financial world.
