Nvidia (NVDA) Stock Falls Over 6% as Investors Rotate Out of AI Play
Nvidia (NVDA) stock took a hit on Monday, falling more than 6% to close at $118.11 per share as investors rotated out of the hottest AI play of the year. This marked the third consecutive day of losses for the chip heavyweight.
The stock has now declined more than 12% from its all-time closing high of $135.58 last Tuesday, when Nvidia briefly surpassed Microsoft (MSFT) as the most valuable company. However, Nvidia has since given back the crown, with its market capitalization now at around $2.9 trillion, below both Microsoft and Apple’s valuations of over $3 trillion each.
Nvidia had been a key driver in pushing the S&P 500 and Nasdaq to record highs in 2024, but the recent sell-off has raised concerns among investors. Wall Street analysts are divided on the outlook for the stock, with some seeing the pullback as a short-term correction while others warn of potential long-term concerns.
Bank of America analysts reiterated a Buy rating and $150 price target for Nvidia, calling it a “top pick” despite the recent volatility. Jefferies analysts also maintained a Buy rating and raised their price target to $150, dubbing Nvidia the “king and kingmaker.”
However, Patrick Moorhead, founder and CEO of Moor Insights & Strategy, cautioned investors to watch for signs that the pullback may be more than just a temporary dip. He emphasized the importance of downstream profitability for companies in Nvidia’s ecosystem, such as Adobe, Salesforce, SAP, and ServiceNow, in sustaining the stock’s growth.
Nvidia CEO Jensen Huang recently spoke at the Computex 2024 exhibition in Taipei, Taiwan, highlighting the company’s continued innovation in the AI space. Despite the recent setbacks, many analysts remain bullish on Nvidia’s long-term prospects.
For more stock market news and analysis, follow senior business reporter Ines Ferre on Twitter at @ines_ferre and visit Yahoo Finance for the latest financial updates.
