NVIDIA, Wall Street’s leading Artificial Intelligence (AI) stock, overtook Microsoft Corporation (MS) to become the largest market cap on the 18th. However, the market cap evaporated by $430 billion, plummeting over 13% throughout the past three trading days.
On the 24th (local time), NVIDIA closed at $118.11 on the New York Stock Exchange, a sharp drop of 6.68% from the previous trading day.
NVIDIA has begun a stock market correction due to a 13% drop in the last three days.
A 10% fall from its peak is considered to have entered a correction phase while more than 20% is regarded as a bear market (downturn).
Market Cap Falls Below $3 Trillion
As a result, the market cap fell to $2.905 trillion, once again falling below $3 trillion and ranking third among U.S. companies, following MS and Apple.
Semiconductor Index Plummets Over 3%
Due to the shock from NVIDIA, the Philadelphia Semiconductor Index also plummeted over 3%, closing the day.
On the New York Stock Exchange, the semiconductor index closed at 5371.52 points, a drastic drop of 3.02% from the previous trading day.
AI Fatigue?
Neville Javeri, a portfolio manager at Allspring Global Investments, analyzed that investors may be exposed to AI fatigue in the short term.
Despite the recent sharp drop, NVIDIA is still up 140% this year, recording the second-highest increase among S&P 500 constituents and following behind fellow AI beneficiary, Super Micro Computer.
About 90% of analysts tracked by Bloomberg recommend buying NVIDIA, reporting that the average target price has a 12% upside from the current level.