In brief
- Nvidia shares plummeted 6.7% on Monday, their third straight loss, and are down 13% from last week’s top.
- Due to the AI surge, several equities that fell sharply on Monday were recent winners.
- After a few hot months, Nvidia and other momentum companies may be locking their gains.
Nvidia has fallen for three straight trading days and is currently 13% below its top after briefly becoming the world’s most valuable corporation last week.
The chipmaker’s stock sank 6.7% to $118.11 on Monday, its second-biggest decline of the year. Chipmakers and other IT businesses related to the AI boom fell alongside Nvidia.
Super Micro Computer, which offers servers using Nvidia’s AI chips, declined 8.7%, while competitor Dell showed a 5.2% decline.
Chip designer Arm fell 5.8%, while Qualcomm and Broadcom fell 5.5% and 3.7%, respectively.
Investors gambled significantly that these companies will benefit from a flood of AI spending, making them some of the greatest winners in recent years.
Despite the three-day dip, Nvidia’s value has nearly tripled in a year. Last week, it surpassed Apple and Microsoft as the most valuable U.S. business with a market cap above $3 trillion, but later lost some gains. Nvidia lost the fourth-most in the S&P 500 on Monday. Super Micro is up nearly 200% in 2024.
After a few hot months, investors may lock in gains.
“I don’t think the party is over, but it’s had a heck of a run and there are so many other places in technology that offer better attractive risk/reward,” Hightower’s Stephanie Link told CNBC on Friday, calling Nvidia shares “overlove
As Microsoft, Google, Amazon, Oracle, and Meta buy billions of dollars in GPUs to power their data centres and cloud services, Nvidia says demand remains high.
Nvidia will deploy its next-generation AI chips, dubbed Blackwell, later this year, which some analysts expect to trigger another growth cycle for the chipmaker and its partners.
Nvidia’s performance “is going to continue for the next 18-24 months,” Constellation Research founder Ray Wang said Monday on CNBC’s Squawk Box. “I think the dip is worth buying.”
Source : CNBC News
