Earlier today, Nvidia experienced a significant stock market crash, resulting in over $500 billion in shares being wiped out. This marks the largest short-term loss for any company in history. However, just a few days ago, Nvidia became the most valuable company globally, with a net worth of around $2.9 billion. The drop caused Nvidia’s market capitalization to fall by 13% in three days due to concerns over the AI bubble potentially bursting. Many analysts have raised these alarms as Nvidia’s share price tripled over the past year due to the increasing value of the computer chips and hardware it produces.
Market analysts stated that some profit-taking is reasonable given Nvidia’s significant rise this year. However, if it continues to decline, there may be a risk of contagion affecting other major tech companies. Despite this, there is currently little indication that investors are worried, and Nvidia is expected to remain a strong force in the market. CEO Jensen Huang selling a portion of his Nvidia shares also contributed to the recent crisis. When Nvidia surpassed Microsoft and Apple to become the top company, it was due to smart pricing strategies and dominance in the chip manufacturing sector. Research shows that Nvidia’s chips hold around 95% of the AI market, giving the company a significant advantage in setting prices.
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