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Nvidia Loses $400 Billion In Market Value Due to Downturn
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Nvidia Market Value Slump: Nvidia overtook Microsoft as Wall Street’s most valuable public company last week. It was a surprise that it fell 13% over three days, its worst dip since 2022.
The company entered correction territory as it extended a sharp recent selloff.
Nvidia Market Value Slump
The stock fell 4.8% and is on track for its third straight negative session. It has dropped 12% over the three-day slide, putting it past the 10% threshold that represents a correction.
The drop weighed on chip makers with the Philadelphia Stock Exchange Semiconductor Index falling as much as 2.2% on Monday. Broadcom, TSMC and Qualcomm were all lower by at least 2%.
The three-day drop erased about US$400 billion from Nvidia’s market capitalization, the biggest three-day value loss for any company in history, according to data compiled by Bloomberg.
This development dropped it back below the $3-trillion threshold, as well as below both Microsoft and Apple in size.
Neville Javeri, portfolio manager and head of the Empiric LT Equity team at Allspring Global Investments expressed his concerns.
He said, “In the near term, it is plausible that investors begin suffering from AI-fatigue or become more broadly concerned about index concentration.”
Nvidia Market Value Slump Did Not Stop Its Progress
However, even with the recent slump, Nvidia has still delivered a robust 140% return to investors this year. It has also delivered a remarkable 1,000% return from its Oct. 2022 bottom.
Also Read: Nvidia surpasses Microsoft as the world’s most valuable company
The Wall Street’s focus on generative AI pushed Nvidia to the top of the chart. This was made possible as Nvidia architects much of the Silicon technology powering AI applications.
According to Forbes, the company reported a 628% year-over-year increase in earnings for its quarter ending April 30, as its earnings power took hold.
However, it likely needs to rapidly grow its financials even further to justify its ballooning valuation.
