Nvidia Loses Over $200 Billion in Market Cap in 2 Sessions
In two consecutive trading sessions, Nvidia's stock decline has caused its market capitalization to plummet, pushing it further away from the top spot as the world's most valuable company.
As of the close of trading on June 21, Nvidia's stock dropped by 3.2%. Over the past two sessions, the company's shares have lost 6.7%, resulting in a staggering $220 billion erosion in market value for the U.S. chip giant.
Currently, Nvidia holds a market value of $3.1 trillion, trailing behind Apple ($3.2 trillion) and Microsoft ($3.3 trillion). Just days after briefly claiming the title of the world's most valuable company, Nvidia has slipped back to third place.
According to Bloomberg, investors see no fundamental reason behind the two-day sell-off. However, the volatility underscores how Nvidia's rapid stock surge (up 200% in just a year) leaves it vulnerable to sudden corrections.
"The unusual volatility in the market with large-cap stocks can wipe out hundreds of millions, even hundreds of billions of dollars in their market cap. Regarding Nvidia, I don't see any issues," commented Russ Mould, Investment Director at AJ Bell.
Some analysts had anticipated this development. In a review on June 19, Bank of America noted that "Nvidia's stock has surged, making it vulnerable if investors decide to take profits."
Nevertheless, they believe this volatility will be short-term. Bank of America continues to recommend buying Nvidia, setting a target price of $150 within the next year, despite the current stock price being $125.
Analysts at Melius Research are even more optimistic, projecting Nvidia's stock to reach $160. This marks the fifth time this year they have raised their forecast.
Fortune's calculations show that a $1,000 investment in Nvidia shares a decade ago would now be worth $300,000.
Source: Bloomberg, Fortune
