Nvidia’s stock took a nosedive on Tuesday, plummeting 8% to $103, outpacing the Nasdaq Composite index’s 2% decline. This marks a 27% drop from its June intraday peak of over $140 per share, pushing the semiconductor chip designer into correction territory.
Key Facts
Nvidia’s market capitalization has taken a massive hit, down about $795 billion from its record $3.3 trillion valuation as of June 18’s market close. This staggering decline has erased more than the equivalent of Tesla‘s market value in just six weeks. The 15% July decline would be Nvidia’s worst monthly performance since September 2022, when its stock traded at a split-adjusted price of below $15.
Why Is Nvidia Stock Down?
The decline can be attributed to a combination of factors, including investors cashing in on their profits and adjusting their portfolios after a period of extended gains. Nvidia’s stock is still up 110% year-to-date and 610% dating back to the end of 2022, delivering impressive returns for a company of its size. Additionally, the slump in semiconductor stocks, triggered by former President Donald Trump‘s hawkish commentary on trade and defense policies in East Asia, has also contributed to Nvidia’s woes. The broader market’s rotation out of big technology companies and into lagging smaller firms has also affected Nvidia’s stock.
Contra
Despite the slump, Nvidia’s financial performance is expected to remain strong. Analysts project the company to grow its net income by 140% year-over-year to $15 billion, with an average target price of $134 per share indicating strong belief in a bounceback for Nvidia stock.
Explosive Take
Nvidia’s stock has been on a wild ride, and this latest swoon is a stark reminder that even the most dominant players in the tech industry are not immune to market volatility. With the company’s market capitalization taking a massive hit, investors are left wondering if this is a buying opportunity or a sign of more trouble to come. One thing is certain: Nvidia’s stock will continue to be closely watched in the coming weeks.
