Why is Nvidia stock down? An 8% midday drop wiped out $277 billion.

The top row or line

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Nvidia stock suffered an unusual rout on Thursday, briefly relinquishing the artificial intelligence engine's title as the planet's most valuable public company and widening Nvidia's price movement. The sensitivity of stock index has been shown.

Key facts

Nvidia's stock sank 8% from its early-morning midday highs, with its shares down 3.5% on the day to $131, up 4% from Thursday's close. open

The intraday swing wiped $277 billion off Nvidia's market value, which sank to $3.27 trillion, leaving Nvidia behind Microsoft after surpassing the more established technology firm's market capitalization on Tuesday. gave

There was no clear catalyst for Nvidia's selloff, indicating it was likely a case of profit-taking after the stock's 170% rally and 800% pop since the start of last year.

Nvidia stock is still up 40% in the last month alone.

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Why are stocks down today?

Critically, Thursday's decline demonstrated broader market sensitivity to Nvidia stock's performance, as the S&P 500 turned its peak 0.3% morning gain into a 0.6% loss by around 1:45 p.m., Nvidia With almost all the fall explained by . Essentially, Nvidia's intraday slide erased the equivalent of Coca-Cola, S&P's 27th most valuable company with a market cap of about $270 billion, from the index.

Key background

It's very common for stocks to fall after a rapid rise like Nvidia's. Broad index funds benefit more from Nvidia's involvement than they hurt, with Nvidia's $2 trillion market cap growing by 2024, a third of the S&P's 15% year-to-date return. . Nvidia, which makes much of the semiconductor technology most in demand for generative AI applications, reported a six-fold increase in revenue in its most recent quarter as customers like Microsoft and Google gravitate to the technology. are ready

Big number

$345,000. That's about what a $10,000 investment in Nvidia exactly five years ago would be worth today. The same amount invested in the S&P would be worth about $20,150.

Further reading

ForbesNvidia—the world's most valuable company—releases another 3% as $4 trillion valuation is in sight
ForbesThese 10 Nvidia shareholders made $36 billion more in one month.

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