Nvidia CEO Jensen Huang generates a speech at an event at COMPUTEX forum in Taipei, Taiwan June 4, 2024.
Ann Wang | Reuters
Since briefly becoming the people’s most valuable company last week, Nvidia has dropped for three consecutive trading days and is now down 13% from its crest.
Monday’s slide was the chipmaker’s second steepest drop of the year, as the stock fell 6.7% to $118.11. Nvidia’s reject brought with it a slide in chipmakers and other tech companies that have been tied to the artificial brainpower boom.
Super Micro Computer, which sells servers packed with Nvidia’s AI chips, fell 8.7 percent, and Dell, which jousts in that market, was off 5.2%.
Chip designer Arm dropped 5.8%, while semiconductor giants Qualcomm and Broadcom dropped 5.5% and 3.7%, individually.
Many of these companies have been some of the biggest gainers in the last couple of years as investors bet heavily that they’ll be the prime beneficiaries of a roller of AI spending.
Nvidia’s value has nearly tripled in the past year even after the three-day slump. Last week, it covered Apple and Microsoft as the most valuable U.S. company with a market capitalization over $3 trillion before divulging up some of those gains. Nvidia was the fourth-biggest loser in the S&P 500 on Monday. Super Micro is still up almost 200% in 2024.
Investors may be captivating an opportunity to lock in gains after a few hot months.
“I don’t think the party is over, but it’s had a heck of a run and there are so many other tasks in technology that offer better attractive risk/reward,” Hightower’s Stephanie Link told CNBC on Friday, area Nvidia shares “overloved.”
Nvidia has said that demand for its prized AI graphics processing units (GPUs) abides high, as companies including Microsoft, Google, Amazon, Oracle, and Meta buy billions of dollars worth of the chips to power their evidence centers and cloud services.
Later this year, Nvidia will start shipping its next-generation AI chips, got Blackwell, that some analysts expect could kick off another up cycle of significant growth for the chipmaker and its helpmeets.
Nvidia’s performance “is going to continue for the next 18-24 months,” Constellation Research founder Ray Wang said on CNBC’s Beef Box on Monday. “I think it’s a good time to buy the dip.”
