on Monday, with the AI-focused chip maker entering correction territory as it extends a sharp recent selloff.
The drop weighed on chip makers with the Philadelphia Stock Exchange Semiconductor Index falling as much as 2.2% on Monday. Broadcom, TSMC and Qualcomm were all lower by at least 2%. The three-day drop erased more than US$400-billion from Nvidia’s market capitalisation, putting it back below the $3-trillion threshold, as well as below both Microsoft and Apple in size. Nvidia briefly claimed the title as the world’s largest stock last week.
The stock suffered a drawdown of about 20% earlier this year, although it quickly returned to all-time highs.While investors have flocked to Nvidia given the sky-high demand for its chips used in AI processing, the scale of Nvidia’s rally — it also soared about 240% over the course of 2023 — has underlined concerns about its valuation. The stock trades at nearly 23x estimated sales over the next 12 months, making it the most expensive in the S&P 500 by this measure.
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