Nvidia pulls back, so is it time to get in?

After continuing to be heavily sold recently, Nvidia on Monday $NVIDIA(NVDA.US)$ The stock price has entered a pullback zone.

The stock fell for the third consecutive trading day and closed down 6.7% on Monday, the biggest one-day decline since April.

According to data compiled by Bloomberg, Nvidia's market capitalization has evaporated a total of about 430 billion US dollars (about RM2.02 trillion) over the past three days, the biggest decline in the three-day market value of a single company in history.

The stock fell by a cumulative total of 13% in three transactions, and more than 10% represented a pullback period. Leading leaders suffered setbacks, and the entire chip sector was also dragged down. The Philadelphia Stock Exchange semiconductor index fell 3%. Broadcom $Broadcom(AVGO.US)$ Down 4%, Qualcomm $Qualcomm(QCOM.US)$ Down 5%, ARM $Arm Holdings(ARM.US)$ A sharp drop of 5.8%. TSMC $Taiwan Semiconductor(TSM.US)$ ADR fell 3.5%.

Nvidia's market capitalization is back below $3 trillion (approximately RM14.1 trillion), lower than Microsoft $Microsoft(MSFT.US)$ and apple $Apple(AAPL.US)$ Market capitalization.

Neville Javary, portfolio manager at Allspring Global Investments and head of the Empiric LT Equity team, said, “In the short term, investors may begin to get fatigued with artificial intelligence or be more concerned about index concentration.”

Despite a sharp drop in stock prices, Nvidia rose more than 140% this year, ranking second among S&P 500 constituent stocks, after Super Micro Computer, another artificial intelligence stock $Super Micro Computer(SMCI.US)$ . Nvidia had a drop of around 20% earlier this year, but it soon returned to an all-time high.

Still the darling of Wall Street

Investors previously flocked to Nvidia due to confidence in the future of AI chip demand. The stock price soared by about 240% in 2023, but this increase also raised concerns about its valuation in the market.

The stock's dynamic capital-to-equity ratio based on estimated sales over the next 12 months is close to 23 times, ranking first among the S&P 500 index constituents.

However, Nvidia is still the darling of Wall Street. Nearly 90% of analysts tracked by Bloomberg recommended buying the stock, and the average price target was about 10% higher than Nvidia's current stock price.

Charlie Ashley, portfolio manager at Catalyst Infrastructure, said the overall momentum of Nvidia and AI stocks was shocking. “On the investment side, I'm not going to go against the trend right now.”

Source: Nanyang Siang Pao

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MomentumPython1337 NVDA Stop: bruh imagine changing ur name to hate on a company lol that's funny jensen is living rent free in your head

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