NVIDIA is a highly volatile stock that experiences extreme ups and downs, as shown in the chart. The stock split earlier this month did not reduce its volatility. Analysts have raised earnings forecasts, but the stock is considered a little expensive with a high P/E ratio. Despite strong earnings, the stock may be overvalued, which could worry investors. Traders are using technical analysis to predict potential support levels as the stock has fallen by 13% in the past three days. Current support is around $115, with the next significant level at $100. However, the long-term trend remains strong. The recent decline in NVIDIA’s stock price has wiped out over $500 billion in value, the largest loss for any company in history. The decline has affected the overall market, with the NASDAQ and S&P 500 experiencing negative returns. Despite the steep losses, the stock is still up nearly 140% in 2024 driven by enthusiasm for artificial intelligence systems. Some analysts believe that the stock could be overvalued and in a bubble, prompting profit-taking by investors. CEO Jensen Huang’s share sales have also raised concerns about the stock’s valuation. As we approach the end of the financial quarter, investors may rebalance their portfolios, leading to further sell-offs in high-flying stocks like NVIDIA. The stock market may experience increased volatility due to quarter-end positioning.Important data to look out for include the Chicago Federal Reserve National Activity Index, Canadian inflation report, US House Price Index, and US consumer confidence report.
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https://amp.theguardian.com/business/live/2024/jun/25/nvidia-selloff-correction-territory-500bn-ai-chip-losses-business-live