Nvidia Stocks Dip Despite Strong Year

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Nvidia,Stock Market,Correction

Nvidia shares fell into correction territory after a recent dip, but the company still boasts strong performance this year. The article discusses the reasons for the decline and the broader market context.

Nvidia shares fell 1.7% on Monday to close at $132. That's around 11% off its closing high of $148.88 in November, putting the company in correction territory. That said, Nvidia is still up 166% this year, and a correction doesn't necessarily signal a sustained downward trend. Moreover, other chipmakers, like AMD, are also experiencing strong growth. This recent dip in Nvidia's stock price comes as the broader market anticipates a more or less certain 25 basis point rate cut by the U.S.

Federal Reserve on Wednesday. But if the rate cut does take place, the Fed 'risks a market melt up' that could eventually cause stocks to crash. Despite the recent decline, Nvidia's position in the semiconductor and artificial intelligence industry remains strong. 'You need Nvidia, and you need their chips for infrastructure,' said Keith Lerner, co-chief investment officer at Truist. 'But I think what the market's also saying is that there are other beneficiaries beyond that.' The fact that the Nasdaq Composite closed at another record despite Nvidia falling is a sign of that rotation into other semiconductor and AI-related stocks.

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