Why Nvidia share price is plummeting after 80% rally in YTD — explained

  • Nvidia stock price crashed over 5.50% on Friday due to two major reasons — weakness in auto major, and disappointing US job date hitting Fed rate cut buzz, say stock market experts

Asit Manohar
Updated11 Mar 2024, 06:36 AM IST
Nvidia stock price has made a strong base in the $810 to $815 per share range, believe stock market experts.
Nvidia stock price has made a strong base in the $810 to $815 per share range, believe stock market experts.(Photo: Getty Images)

Nvidia share price crashed over 5.50 percent on Friday and erased around $128 billion of investors. The Nasdaq-listed AI poster boy of 2024 registered sharp selling during the Friday session on Wall Street and ended at $875.28 per share, logging around 10 percent dip from its lifetime high of $974 per share level. Nvidia stock price opened at $951.38 per share level and went on to touch a new high of $974 apiece on Nasdaq during Friday deals. However, Nvidia stock failed to sustain at higher levels after the profit-booking trigger, which further deepened following the selling pressure in the S&P 500 and Nasdaq indices.

According to stock market experts, Nvidia stock price crashed after climbing to a new peak on Friday because of the selling pressure in the S&P 500 index and tech-heavy Nasdaq index. They said that selling pressure in these Wall Street indices was caused by disappointing US job data that dampened the US fed rate cut buzz. Apart from this, dips in sales and weak quarterly numbers of the US auto majors — Tesla,  Broadcom, and Costco — was another reason for the Nvidia stock price fall on Friday.

Reasons for Nvidia stock price fall

Speaking on the reasons that triggered selling pressure in Nvidia stocks, Sandeep Pandey, Founder of Basav Capital said, "Nvidia is a chip maker company, which draws a good amount of business from American auto majors Tesla, Costco, and Broadcom. All these three companies have delivered weak quarterly numbers and all these three auto majors witnessed sharp selling pressure on Friday. This led to profit-booking trigger in Nvidia share price at record high levels."

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On why Nividia stock price witnessed sharp selling after the profit-booking trigger, Avinash Gorakshkar, Head of Research at Profitmart Securities said, "Nvidia stocks are the AI poster boy of the US stock market. It registered a sharp upside move in 2024 and now it is the third largest S&P 500 company after Microsoft and Apple. Selling in NVidia stocks deepened on Friday because of the disappointing US job data and rise in the US unemployment data. This dampened the US Fed rate cut buzz, which triggered profit-booking and panic selling in the US stock market. That's why Nvidia stock price tumbled further after the profit-booking trigger at record higher levels."

Nvidia stock price prediction

On Nvidia stock price outlook, Sandeep Pandey of Profitmart Securities said, "Nvidia stock price has made a strong base in the $810 to $815 per share range. Those who have Nvidia stocks in the portfolio, are advised to maintain a strict stop loss below $810 level."

On whether it is an opportunity for bottom fishing, Sandeep Pandey of Basav Capital advised fresh investors to wait as the stock may correct more if the US Fed officials talk hawkish on interest rates.

Nvidia share price history

Despite the over 5.50 percent crash in Nvidia stock price on Friday, the AI poster boy of the US stock market is one of those stocks in the US stock market that have delivered stellar returns to investors. In the last one month, Nvidia stock price has ascended over 20 percent while in the last six months, it has risen over 90 percent. In YTD, Nvidia share price has shot up from $481.68 per share to $875.28 apiece level, logging a nearly 80 percent rise in 2024. However, in the last one year, Nvidia stock price has appreciated from $234.36 per share level to $875.28 per share mark, delivering to the tune of 275 percent return to its investors.

Disclaimer: The views and recommendations above are those of individual analysts, experts, and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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First Published:11 Mar 2024, 06:36 AM IST
HomeMarketsStock MarketsWhy Nvidia share price is plummeting after 80% rally in YTD — explained

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