Nvidia Stock Sinks 7% as Market Declines
Nvidia (NVDA) stock took a hit on Tuesday, dropping 7% as the overall market experienced a decline on the first trading day of the month. The AI chip maker was the worst performer among the “Magnificent 7” stocks, falling to its lowest level since mid-August.
Stacy Rasgon, a senior analyst at Bernstein, mentioned that Nvidia’s decline was not isolated, as many other stocks were down on the same day. Technology (XLK) stocks led the declines, prompting investors to rotate into defensive sectors like Staples (XLP) and Utilities (XLU).
This drop comes shortly after Nvidia reported quarterly results that surpassed consensus estimates but failed to boost the stock price. The concern was mainly around the company’s gross margins, which are expected to decrease slightly towards the end of the year.
Looking ahead, Nvidia is set to ramp up production of its next-generation chip Blackwell in the fourth quarter of this year. This move could potentially drive the stock price higher once the new chips hit the market.
Analysts at Stifel remained bullish on Nvidia stock, reiterating their Buy rating and setting a $165 price target. They believe that the modernization of data center compute will continue, with Nvidia being a primary beneficiary.
Despite the recent losses, Nvidia had been leading the rebound in stocks, climbing nearly 25% in just three weeks following a global market sell-off. Year-to-date, the stock is still up over 125%.
Stay informed on the latest financial news and stock updates by following Ines Ferre, a senior business reporter for Yahoo Finance, on Twitter at @ines_ferre.
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