Nvidia drops 10% as AI enthusiasm slows
Nvidia shares drop 9.5% in one day
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Nvidiashares are down 9.5% since yesterday amid growing concern among investors that theAImarket could be experiencing a slowdown.
Share prices now stand at $108, down from a high of more than $135 in June. This translates to a market cap of $2.02 trillion, after Nvidia hit an all-time high of more than $3 trillion earlier this summer.
Moreover, the FTSE 100 index dropped 0.76%, with FTSE Russell representative Julia Lee noting (via theBBC): “Growth concerns are dominating market moves.”
Is the AI market slowing down?
The sentiments have been mirrored across the board, with the S&P 500 index dropping 2% and Nasdaq falling by 3%.
While tech giants like Alphabet,AppleandMicrosofthave seen shares drop, Nvidia saw the biggest hit, with $279 billion wiped off its market cap in the space of a day. While its valuation may stand at nine times that of the pre-ChatGPTAI boom, it has already lost one-third in the months following it becoming the world’s most valuable company, rated at more than $3 trillion.
Lee also noted a similar decline in Asian markets, including Japan’s Nikkei 225, South Korea’s Kospi and Hong Kong’s Hang Seng: “Concerns around global growth look to be hitting exporting countries in the region particularly hard.”
Understanding why Nvidia has been hit so hard is a two-pronged tale – the company already indicated that a natural deceleration to growth would be inevitable, but emerging antitrust investigations into the company both in the US and Europe have likely proven a cause for concern among investors.
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Other factors, such as US jobs figures set to be announced later this week and an interest rate decision by the US Federal Reserve due next week, are also at play in dwindling shares in the sector.
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With several years’ experience freelancing in tech and automotive circles, Craig’s specific interests lie in technology that is designed to better our lives, including AI and ML, productivity aids, and smart fitness. He is also passionate about cars and the decarbonisation of personal transportation. As an avid bargain-hunter, you can be sure that any deal Craig finds is top value!
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