Despite NVIDIA’s over 6% plunge, the Philadelphia Semiconductor Index, which tracks semiconductor companies, fell only 1.84%.
On Tuesday, the Semiconductor Index closed at 5,212.24 points, down 1.84% on the New York Stock Exchange. While NVIDIA suffered a sharp decline, the overall index limited losses.
NVIDIA’s stock dropped 6.22% from the previous trading day, closing at $140.14. This decline reduced the company’s market capitalization to $3.432 trillion.
A day earlier, CEO Jensen Huang had painted an optimistic picture at the Consumer Electronics Show (CES), the world’s largest consumer electronics exhibition, unveiling new chips and outlining ambitious plans for autonomous vehicles and robotics.
Following these announcements, several brokerages upgraded their ratings and price targets for NVIDIA.
Firms like Stifel, Wedbush, and Truist Securities reiterated their “buy” ratings for NVIDIA and raised their target prices.
Truist Securities analyst William Stein noted in an investment memo that NVIDIA is increasingly well-positioned across all areas, including data centers, client computing, autonomous vehicles, and robotics while maintaining the buy rating.
However, NVIDIA’s sharp decline of over 6% seemed to confirm Wall Street’s adage, “Buy the rumor, sell the news.”
Before Huang’s speech, NVIDIA’s stock surged more than 3% to hit an all-time high.
However, investors were disappointed by the lack of a groundbreaking announcement, leading to the sell-off.
NVIDIA’s plunge had a ripple effect, with rival AMD dropping 1.71%, Broadcom sliding 3.29%, and Taiwan’s TSMC falling 3.90%.
On the other hand, Intel, which had declined sharply in the previous session, saw bargain-hunting drive its stock up by 0.70%. Micron Technology, the largest DRAM producer in the U.S., also rose 2.6Thus, and some semiconductor stocks recorded gains.
As a result, the overall Semiconductor Index ended with a modest decline of just over 1%.