Nvidia Corp. has experienced a significant drop in its stock value, wiping out about $406 billion this week. The decline has affected major stock indexes, raising concerns about the U.S. economy and the potential overvaluation of AI technology.
Nvidia’s Volatility Outpaces Other Tech Giants
Over the past two weeks, Nvidia, the world’s largest AI chipmaker, has lost 20% of its value. The company’s stock has become far more volatile than its tech peers, with swings between $90.69 and $131.26 in the last 30 trading days. Nvidia’s 30-day volatility has reached about 80, which is much higher than companies like Microsoft and even Bitcoin.
A Difficult Two Weeks for Nvidia
Nvidia’s recent slump marks its worst two-week stretch in two years. Several factors contributed to the drop, including a weak sales forecast, issues with the new Blackwell chip, and an ongoing antitrust investigation by the U.S. Department of Justice. Further adding to the pressure, chipmaker Broadcom also reported disappointing sales forecasts.
Despite the Dip, Nvidia Has Had a Strong Year
Despite the recent challenges, Nvidia has still had a very successful year. The company’s stock is up more than 100%, adding $1.3 trillion in market value. Wall Street analysts remain optimistic about Nvidia’s future, as major companies like Microsoft, Meta, Alphabet, and Amazon continue to invest heavily in AI technology.
Strong Financial Results and Mixed Investor Reactions
Nvidia’s financial results last week were impressive, with revenue more than doubling and surpassing expectations. However, the company’s sales forecast, while positive, didn’t meet the highest estimates, leaving some investors underwhelmed and skeptical about the long-term growth of AI spending.
A Long-Term Opportunity for Investors
As AI continues to develop, volatility in Nvidia and other chipmaker stocks is expected to persist. Despite the current uncertainty, many long-term investors see this as a good opportunity to buy. Rhys Williams from Wayve Capital believes it’s a great time for investors to consider adding AI-related stocks to their portfolios.
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