By
staff writer
June 18th, 2024
Nvidia, an American multinational, saw its stock plummeting, losing over $500 billion in just three days.
Nvidia, recently became the world’s most valuable company after breaking above the $3 trillion market capitalization threshold, surpassing Microsoft and Apple. However, the company’s stock plummeted significantly in the past few days, leading to a loss of more than $500 billion in just three days.
As per the data from companiesmarketcap, Microsoft and Apple currently surpass Nvidia with market caps of $3.327 trillion and $3.191 trillion, making them two of the most valuable companies around the globe. On the other hand, Nvidia’s market cap currently stands at $2.905 trillion.
According to the chart presented by TradingView, NVDA has performed exceptionally well in the past few months. The stock has rallied massively since the lows of $10 witnessed in October 2022 and reached an all-time high above the $140 price tag, making employees with stock options and shareholders millions of dollars.
The company’s investment in artificial intelligence (AI) and its dominance in the GPU sector are some of the reasons why the shares made new highs and might continue to outperform the market in the near future.
However, the price of the NVDA shares fell sharply from the ATH of $140 in the past few days as investors capitalized on the gains that they have made in the past few months. The daily candle on Monday closed at $118 for the stock, signifying an 18% decline in the price with three consecutive bearish candles.
As per the TradingView chart, the relative strength index (RSI) for Nvidia shows that the price action of the stock is still under the influence of bulls and was in the overbought region for most of June. This correction was expected since overbought RSI levels are generally followed by investors capitalizing on their profits.
The RSI is still above 50, but the gradient shows that there is a possibility for Nvidia stock to go into the bearish region, which would mean that the sellers would be in control of the market.
Reasons for the Nvidia Rally
According to Constellation Research, the Nvidia stock rally is far from over, and the price will reach $200 per share over the next 12 months. As per a report from Business Insider, Constellation founder R “Ray” Wang believes that Nvidia’s dominance in the GPU sector, which has fueled the AI boom, will be a key driver of the stock price.
Wang compared Nvidia’s performance to the PC age, where “Microsoft, Intel, and Cisco served as a triumvirate foundational players.” He believes that “this new era will have new players all tied back to Nvidia,” adding that the chief executive of the company, Jensen Huang, is a visionary.
“It’s a visionary-led CEO, and that’s very very important as you’ve seen in the valley. Those are the ones that have led, like the Larry Ellisons of the world, the scott Mcnealys, the Mark Zuckerbergs,” Wang said.
Wang said that the competitors of Nvidia are “behind by 24 months,” and the California-based company has more products lined up. People have seen only a fraction of the company’s roadmap, Wang added.