NVIDIA Stock Falls Over 3% for Two Consecutive Days... "Vulnerable to Profit-Taking"

Behind MS and Apple, Ranked 3rd in Market Cap
Positive Outlook Remains on Wall Street

The stock price of Nvidia, the leading company in artificial intelligence (AI) chips, fell by more than 3% for two consecutive days.

On the 21st (local time) at the New York Stock Exchange, Nvidia's stock closed at $126.57, down 3.22% from the previous session. Based on the closing price that day, Nvidia's market capitalization decreased to $3.113 trillion, dropping to third place behind Microsoft ($3.342 trillion) and Apple ($3.181 trillion). On the same day, Microsoft's stock rose 0.92%, while Apple's stock fell 1.04%.

NVIDIA Graphics Processing Unit (GPU)
[Image source=AFP Yonhap News]

Nvidia's stock price rose 3.51% on the 18th, reaching an all-time high of $135.58 and becoming the first to top the market capitalization rankings. However, on the next trading day, the 20th, it fell 3.54%, ceding the top spot back to Microsoft, and on this day, it also fell behind Apple. Bank of America explained Nvidia's stock trend by saying that "the steep rise made it vulnerable to profit-taking by existing investors."

Patrick Moorhead, founder of market analysis firm Moor Insights & Strategy, said in an interview with Yahoo Finance that fierce competition in the industry could become a headwind for Nvidia's profits. He explained that not only existing competitors like AMD and Intel but also companies developing their own products such as Amazon, Microsoft, and Google should be cautious.

He also said, "If software companies like Adobe and Salesforce and consumers do not pay more for new AI features, this whole windfall train could stop, similar to the 'dot-com bubble' era." Nevertheless, he added that there is a high possibility that positive signals will continue, saying, "I see no reason why Nvidia's market cap cannot rise to $4 trillion."

Bank of America also maintained a buy rating on Nvidia, a target price of $150, and named it a top pick, stating that "volatility will be short-term."

Wedbush Securities analyst Dan Ives compared the AI revolution to "a party that has just begun" in a memo sent to clients the previous day, referring to the spending trends of giant tech companies on data centers. Ives said, "At a party that will last until 4 a.m., it is now 9 p.m.," adding, "The rest of the tech industry is now joining."

This content was produced with the assistance of AI translation services.