Nvidia shares bounced back after a recent decline, reclaiming their position as the world’s most valuable public company. The American chipmaker saw a nearly 7% increase in shares on Tuesday, following three days of losses that raised concerns among investors about the company’s role in the artificial intelligence revolution.
Deutsche Bank’s research strategist, Jim Reid, expressed skepticism about the market’s enthusiasm for AI, suggesting that there has been excessive exuberance in the US market recently. Despite reaching a market capitalization of $3.34 trillion on June 18, Nvidia suffered a $430 billion loss over the next three days, dropping to third place behind Microsoft and Apple.
Nvidia has experienced significant growth in its shares, rising over 161% since January. The company’s chips power AI systems, including generative AI like OpenAI’s ChatGPT. The frenzy surrounding AI’s potential to transform various industries and provide high returns for investors has been a driving force behind the stock market’s performance in recent years.
As a member of the Magnificent Seven tech companies, Nvidia has outperformed the broader US stock market rally in the past year. Deutsche Bank highlighted the concentration of these seven stocks in the market, noting that Nvidia’s fall has impacted overall US equity returns. The tech-heavy Nasdaq benefited from Nvidia’s rally on Tuesday, rising 1.3%, while the S&P 500 also closed 0.4% higher.
Despite the recent volatility in Nvidia’s shares, the company’s role in the AI sector and its market capitalization remain significant. The rebound in Nvidia’s shares on Tuesday reflects the ongoing interest and investment in AI technologies, contributing to the company’s position as a key player in the industry.
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https://www.cnn.com/2024/06/25/tech/nvidia-stock-fall-worlds-third-biggest-company/index.html