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<\/p>\n","protected":false},"excerpt":{"rendered":"Nvidia shares entered correction territory on Monday, as an ongoing selloff erased a historic amount of value for the AI-focused chipmaker.<\/p>\n
The stock fell 6.7%, its third straight negative session and biggest one-day percentage drop since April.<\/p>\n
The three-day drop erased about $430 billion (R7.8 trillion) from Nvidia\u2019s market capitalization, the biggest three-day value loss for any company in history, according to data compiled by Bloomberg.<\/p>\n
Shares fell 13% over the period, past the 10% threshold that represents a correction.<\/p>\n
The drop weighed on chipmakers with the Philadelphia Stock Exchange Semiconductor Index falling 3% on Monday.<\/p>\n
Broadcom fell 4% while Qualcomm Inc. dropped 5.5% and ARM Holdings slumped 5.8%. US-listed shares of Taiwan Semiconductor Manufacturing shed 3.5%.<\/p>\n
The drop put Nvidia\u2019s valuation back below the $3 trillion (R54.2 trillion) threshold and under both Microsoft and Apple in size.<\/p>\n
Nvidia\u00a0briefly claimed\u00a0the title as the world\u2019s largest stock last week.<\/p>\n
\u201cIn the near-term, it is plausible that investors begin suffering from AI-fatigue or become more broadly concerned about index concentration,\u201d said Neville Javeri, portfolio manager and head of the Empiric LT Equity team at Allspring Global Investments.<\/p>\n
Even with the slump, Nvidia remains up nearly 140% this year, making it the second-best performer among S&P 500 Index components, behind Super Micro Computer, another favourite AI play.<\/p>\n
The stock suffered a drawdown of about 20% earlier this year, although it quickly returned to all-time highs.<\/p>\n
While investors have flocked to Nvidia given the sky-high demand for its chips used in AI processing, the scale of Nvidia\u2019s rally \u2014 it soared about 240% over the course of 2023 \u2014 has underlined concerns about its valuation.<\/p>\n
The stock trades at 21 times estimated sales over the next 12 months, making it the most expensive in the S&P 500 by this measure.<\/p>\n
Still, it remains well-liked on Wall Street.<\/p>\n
Nearly 90% of the analysts tracked by Bloomberg recommend buying, and the average analyst price target points to upside of about 12% from current levels.<\/p>\n
\u201cThe momentum in Nvidia and AI stocks in general has been staggering,\u201d said Charlie Ashley, portfolio manager at Catalyst Funds.<\/p>\n
\u201cIn terms of investing, I would not be a contrarian right now.\u201d<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
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