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  • Writer's pictureRealFacts Editorial Team

Nvidia’s Rollercoaster: Tech Titans and Turbulence

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Stephanie Link from Hightower, this week remarked, “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.” Nvidia’s recent ups and downs in the stock market highlight how unpredictable the tech industry can be, where rapid gains can quickly turn into steep losses.

Last week, Nvidia briefly claimed the title of the world’s most valuable company, only to face a sharp reversal with a three-day slide that wiped out 13% of its peak value. The downturn culminated in a significant 6.7% drop on Monday, pushing the stock price down to $118.11, marking one of its biggest declines this year. The fallout from Nvidia’s retreat extended beyond its own stock, affecting a network of companies deeply tied to the artificial intelligence sector. Super Micro Computer, reliant on Nvidia’s AI chips for its servers, saw its shares drop by 8.7%, while competitors like Dell experienced a 5.2% decline. The impact also rippled through chip designer Arm, as well as semiconductor giants Qualcomm and Broadcom, which saw declines ranging from 3.7% to 5.8%.

Despite these recent setbacks, Nvidia’s trajectory over the past year has been notably bullish, nearly tripling in value even after accounting for the recent downturn. However, investor sentiment appears cautious amid concerns of potential overvaluation, as highlighted by Stephanie Link’s observation that Nvidia shares may have become “overloved.” Nevertheless, Nvidia remains confident about sustained demand for its AI GPUs, backed by strong purchases from tech giants such as Microsoft, Google, and Amazon, all committed to enhancing their data infrastructure with Nvidia’s technology. Looking ahead, Nvidia anticipates launching its next-generation AI chips, Blackwell, later this year, which could potentially reignite growth and reinforce its leadership in the AI hardware market. Analysts like Ray Wang from Constellation Research see the current downturn as a potential buying opportunity, advising investors to consider capitalizing on the dip with expectations of continued growth over the next 18-24 months.


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