NVIDIA Tops WSB Rankings Despite Record $279 Billion Market Cap Plunge
Wednesday, Sep 4, 2024 7:02 am ET
2min read NVIDIA ranks first in the latest WSB rankings, maintaining its position from the previous day.
NVIDIA (NVDA) saw a sharp 9.53% decline.
AI chip leader NVIDIA, often lauded as the "world's most important stock," faced a significant market downturn on Tuesday, with its valuation plummeting approximately $279 billion. This triggered a massive sell-off in the broader chip and tech sectors in the U.S. and also affected Asian chip stocks, leading to steep declines in the Asian markets on Wednesday. Despite this, bottom-buying investors appear to be seeking opportunities to buy into beaten-down AI-benefiting chip stocks like NVIDIA.
Just four weeks after a significant sell-off triggered by "Black Monday," NVIDIA, once the company with the highest market cap globally, has sparked another broad sell-off in the U.S. stock market. NVIDIA's nearly 10% drop erased $279 billion of its market value, marking the largest single-day market cap loss in U.S. stock history. Post-market trading saw a further 2% drop, pushing the total market cap loss to over $300 billion, higher than the combined values of AMD and Intel.
September has historically been a volatile month for the U.S. stock market, often described as cursed for investors. Recent weak manufacturing data and rising pay prices have heightened inflation fears, while disappointing tech earnings reports, heavy AI spending, and concerns about AI's long-term impact on global growth have cast doubt on the sector's lofty valuations.
In Asia, top chipmakers such as SK Hynix, TSMC, Tokyo Electron, and Advantest saw considerable losses, tightening the grip on investors who had previously benefited from the chip boom. The VIX index, a measure of market volatility, rose sharply on Tuesday, and upcoming U.S. jobs data on Friday could introduce further instability, potentially impacting NVIDIA and its suppliers.
However, aggressive "YOLO" investors on platforms like Reddit and X seem poised to buy the dip in beaten-down AI chip stocks. Market sentiment on Wall Street remains cautiously optimistic, with some believing the correction has purged most of the AI bubble excess.
Prominent analysts maintain a positive outlook on NVIDIA, with some endorsing it as a strong buy. Bank of America analyst Vivek Arya reiterated his "buy" rating for NVIDIA, raising the target price from $150 to $165, despite its Tuesday closing price of $108.
The AI chip-driven recovery in the semiconductor sector appears strong, as detailed in the latest data from the Semiconductor Industry Association, showing substantial growth in global semiconductor sales both quarterly and annually.
Gartner projects that generative AI and large language models will drive demand for AI-powered high-performance servers, predicting global AI chip revenues to reach about $71 billion in 2024, a 33% increase from 2023.
Looking ahead, stakeholders remain optimistic about AI and its demand in the coming years, despite current market volatilities and geopolitical factors.
NVIDIA (NVDA) saw a sharp 9.53% decline.
AI chip leader NVIDIA, often lauded as the "world's most important stock," faced a significant market downturn on Tuesday, with its valuation plummeting approximately $279 billion. This triggered a massive sell-off in the broader chip and tech sectors in the U.S. and also affected Asian chip stocks, leading to steep declines in the Asian markets on Wednesday. Despite this, bottom-buying investors appear to be seeking opportunities to buy into beaten-down AI-benefiting chip stocks like NVIDIA.
Just four weeks after a significant sell-off triggered by "Black Monday," NVIDIA, once the company with the highest market cap globally, has sparked another broad sell-off in the U.S. stock market. NVIDIA's nearly 10% drop erased $279 billion of its market value, marking the largest single-day market cap loss in U.S. stock history. Post-market trading saw a further 2% drop, pushing the total market cap loss to over $300 billion, higher than the combined values of AMD and Intel.
September has historically been a volatile month for the U.S. stock market, often described as cursed for investors. Recent weak manufacturing data and rising pay prices have heightened inflation fears, while disappointing tech earnings reports, heavy AI spending, and concerns about AI's long-term impact on global growth have cast doubt on the sector's lofty valuations.
In Asia, top chipmakers such as SK Hynix, TSMC, Tokyo Electron, and Advantest saw considerable losses, tightening the grip on investors who had previously benefited from the chip boom. The VIX index, a measure of market volatility, rose sharply on Tuesday, and upcoming U.S. jobs data on Friday could introduce further instability, potentially impacting NVIDIA and its suppliers.
However, aggressive "YOLO" investors on platforms like Reddit and X seem poised to buy the dip in beaten-down AI chip stocks. Market sentiment on Wall Street remains cautiously optimistic, with some believing the correction has purged most of the AI bubble excess.
Prominent analysts maintain a positive outlook on NVIDIA, with some endorsing it as a strong buy. Bank of America analyst Vivek Arya reiterated his "buy" rating for NVIDIA, raising the target price from $150 to $165, despite its Tuesday closing price of $108.
The AI chip-driven recovery in the semiconductor sector appears strong, as detailed in the latest data from the Semiconductor Industry Association, showing substantial growth in global semiconductor sales both quarterly and annually.
Gartner projects that generative AI and large language models will drive demand for AI-powered high-performance servers, predicting global AI chip revenues to reach about $71 billion in 2024, a 33% increase from 2023.
Looking ahead, stakeholders remain optimistic about AI and its demand in the coming years, despite current market volatilities and geopolitical factors.
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