Nvidia Stock Price Plummets: Reasons and Outlook
The Nvidia stock price witnessed a significant downturn, plummeting over 5.50% on Friday and wiping out approximately $128 billion of investors’ wealth. This sharp decline came amidst a tumultuous session on Wall Street, marked by heavy selling pressure in the S&P 500 and Nasdaq indices.
Opening at $951.38 per share, Nvidia’s stock price surged to a new high of $974 apiece during Friday’s trading session on Nasdaq. Nvidia Stock Price However, the euphoria was short-lived as profit-booking triggered a swift reversal, exacerbated by broader market pressures.
Experts attribute the decline in Nvidia stock price to several factors, including disappointing US job data and lackluster quarterly performances from major players in the automotive and retail sectors. Companies such as Tesla, Broadcom, and Costco reported weaker-than-expected results, prompting a sell-off in their respective shares and contributing to the downward spiral in Nvidia’s stock price.
Sandeep Pandey, Founder of Basav Capital, highlighted the dependency of Nvidia on American auto giants like Tesla, Costco, and Broadcom, all of which experienced significant selling pressure following their lackluster quarterly reports. This resulted in profit-booking at record highs for Nvidia shares.
Avinash Gorakshkar, Head of Research at Profitmart Securities, emphasized the broader market sentiment influenced by disappointing US job data and rising unemployment figures. The dampened expectations of a US Federal Reserve rate cut triggered panic selling across the market, exacerbating the decline in Nvidia stock price.
Looking ahead, experts suggest maintaining a cautious approach towards Nvidia shares. Sandeep Pandey advises investors to set strict stop-loss levels below $810 per share, emphasizing the importance of risk management in volatile market conditions.
However, for those considering bottom fishing, Pandey suggests exercising patience, as further corrections may occur, particularly if US Fed officials adopt a hawkish stance on interest rates.
Despite the recent downturn, Nvidia remains a standout performer in the US stock market, delivering impressive returns to investors over various time frames. With a stellar performance over the last one month, six months, and year-to-date, Nvidia’s resilience underscores its position as a key player in the technology sector.
As investors navigate through turbulent market conditions, the outlook for Nvidia stock remains uncertain, with market sentiment and macroeconomic factors likely to dictate its future trajectory. However, amidst the volatility, diligent risk management and a long-term perspective are essential for navigating the ups and downs of the market.
