NVIDIA shares dropped by 5% on Monday, marking the third consecutive day of losses for chip heavyweight stocks. The stock fell more than 11% from its recent all-time high, entering correction territory. Despite briefly surpassing Microsoft to become the most valuable company, NVIDIA’s market cap has since fallen to around $2.9 trillion, below that of Microsoft and Apple.
The chipmaker completed a 10-for-1 split in June and was previously instrumental in boosting the S&P 500 and Nasdaq to record highs. Analysts are divided on whether the recent sell-off is indicative of long-term concerns. Bank of America maintains a Buy rating on the stock with a price target of $150, while Jefferies raised their price target to $150, calling NVIDIA the “king and kingmaker.”
Patrick Moorhead of Moor Insights & Strategy cautions investors to watch for signs of a sustained pullback, noting the importance of profitability for companies in the AI ecosystem. He emphasizes the impact on software companies like Adobe, Salesforce, SAP, and ServiceNow, suggesting that if consumers are not willing to pay more for AI features, the industry could face a similar crash to the Internet bubble burst.
Looking forward, Moorhead predicts that NVIDIA’s dominance will likely continue for the next six to nine months, but urges investors to monitor profitability in the ecosystem. Overall, the market remains uncertain as NVIDIA’s stock experiences volatility amidst speculation about its future performance. Inés Ferré, a senior business reporter at Yahoo Finance, continues to cover developments in the industry.
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https://finance.yahoo.com/news/nvidia-stock-falls-5-extends-slide-into-correction-territory-165458232.html
