Nvidia, the leading AI chip manufacturer, continues to face market pressure as its stock fell an additional 1.66% on Wednesday, following Tuesday’s record-breaking $279 billion loss in market value. The company’s recent troubles stem from multiple factors, including a subpoena from the U.S. Department of Justice as part of an antitrust investigation, growing skepticism about the timetable for AI investment payoffs, and broader economic concerns.Despite the recent downturn, Nvidia’s stock remains up 118% year-to-date, highlighting the volatile nature of high-growth tech stocks. As Angelo Zino, senior vice president at CFRA Research, noted, ‘When you look at the valuation of this company, it’s trading at a big discount to where it actually historically trades at’. This sentiment is echoed by some analysts who see potential in Nvidia’s long-term prospects, with Bank of America raising its price target from $150 to $165.The broader U.S. stock market showed mixed results on Wednesday, with the Dow Jones Industrial Average gaining 0.09%, while the S&P 500 fell 0.16% and the Nasdaq Composite dropped 0.30%. Investors remain cautious ahead of Friday’s job report and the upcoming Federal Reserve meeting. The labor market is showing signs of cooling, with job openings falling to 7.67 million in July, below pre-pandemic levels.The recent market volatility has sparked discussions about the sustainability of AI-driven market enthusiasm and the potential for an AI bubble. As one analyst noted, ‘The Nvidia collapse is a canary in the coal mine for the broader tech sector’. However, others argue that the shift towards AI-enabled devices will continue to drive demand for data centers, potentially benefiting companies like Nvidia in the long term.
Key points
- Nvidia’s stock fell 1.
- The U.
- Despite recent losses, Nvidia’s stock remains up 118% year-to-date.
- The broader U.
66% on Wednesday, following a record $279 billion loss on Tuesday.
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Department of Justice sent Nvidia a subpoena as part of an antitrust investigation.
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stock market showed mixed results, with investors cautious ahead of Friday’s job report.
Contradictions👾While some analysts see Nvidia’s current valuation as a potential buying opportunity, others warn of a possible AI bubble and broader tech sector risks.
