Market News
3 min read | Updated on June 22, 2024, 08:25 IST
SUMMARY
Nvidia's retreat from the top spot marked a swift reversal, as the company had surged past Microsoft only three days ago when its m-cap crossed $3.3 trillion.
Nvidia has slipped behind Apple and Microsoft to the third spot
Nvidia, which became the world's most valuable company in terms of market capitalisation earlier this week, has been dethroned from the spot following a $220 billion worth shares selloff.
Nvidia's shares declined for two consecutive days on Thursday and Friday, pulling the stock down by 6.7%. On the NASDAQ, the scrip last closed at $126.57, which was down 3.22% as against the previous day's close.
The drubbings at the stock market has lowered the company's market capitalisation to $3.1 trillion.
As a result, tech behemoth Microsoft reclaimed the number one spot with market cap of $3.3 trillion, and its rival Apple stands at the second most valuable company with market cap of $3.2 trillion.
Nvidia's retreat from the top spot marked a swift reversal, considering that the company's shares have been consistently rising over the past several months.
Analysts said there was no fundamental reason behind the decline in stock, and profit-booking seems to the mostly likely factor for the selloff.
"Considering that the stock has risen at a trailblazing rate of 194% in the last one year, there are possibilities that such retreats may be visible going forward," a New York-based market expert commented.
The 3.22% decline in Nvidia stock on Friday coincided with the dip in broader indices. The tech-heavy NASDAQ Composite settled 0.18% lower at 17,689.36, and S&P 500 dipped 0.16% to 5,464.62.
The latest decline has not dampened the sentiment among bulls, who see further upside in Nvidia's stock.
Even as the shares dropped on Friday, analysts at Melius Research increased their price target to $160 from $125. This marked their fifth upward revision for the company's shares in 2024.
“We continue to believe that Nvidia is in better shape than some SaaS ‘leaders’ who are yet to prove that AI is incremental to the story in our opinion,” Ben Reitzes, analyst at Melius Research, wrote.
Nvidia can absorb a larger portion of the enterprise application software market cap as "profits transfer to their stack", Reitzes further argued.
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