Nvidia (NVDA) saw its stock price decline by over 6% to close at $118.11 per share on Monday, marking the third consecutive day of losses for the chip heavyweight as investors shifted away from the high-flying AI sector.
The drop follows a more than 12% decline from Nvidia’s recent peak closing price of $135.58, achieved last Tuesday when the company briefly surpassed Microsoft (MSFT) in market capitalization.
Despite briefly holding the top spot, Nvidia’s market cap has retreated to approximately $2.9 trillion, trailing behind both Microsoft and Apple (AAPL), each valued at over $3 trillion.
Throughout much of last week, Nvidia played a significant role in driving the S&P 500 (^GSPC) and Nasdaq (^IXIC) to repeated record highs in 2024.
Following a 10-for-1 stock split on June 10, Nvidia has garnered mixed reactions from Wall Street analysts regarding the recent sell-off’s implications for the stock’s long-term outlook.
Bank of America analysts expressed confidence in Nvidia’s resilience, reaffirming a Buy rating and a price target of $150, while suggesting that any market volatility is likely to be short-lived.
Jefferies analysts maintained a Buy rating and raised their price target to $150 from $135 over the weekend, emphasizing Nvidia’s pivotal role in the tech sector.
However, Moor Insights & Strategy founder and CEO Patrick Moorhead cautioned investors to monitor signs of a sustained pullback, noting that while Nvidia’s dominance may continue in the near term, downstream profitability among ecosystem partners like Adobe, Salesforce, SAP, and ServiceNow will be critical.
Moorhead emphasized the importance of these companies’ willingness to invest in AI technologies, cautioning that a slowdown in such investments could impact Nvidia’s future growth prospects.
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