Nvidia nosedives 6.68% in third day of slump; $430 billion erased from market cap

Nvidia's shares were hammered for the third consecutive day at the US stock market, with the company nosediving 6.68% during the trading on Monday.

The slump over the past three trading sessions has erased $430 billion from Nvidia's market capitalisation, dragging it below the $3 trillion mark.

The decline, which a section of market analysts see as a correction in Nvidia's value, comes barely days after the Jensen Huang-led company had emerged as the world's most valuable entity in terms of market cap.

At the NASDAQ, Nvidia settled at $118.11 apiece, down $8.46 or 6.68% as against the last closing price. The weighing down of Nvidia affected the performance of the tech-heavy NASDAQ Composite, which plunged 192.54 points or 1.09% to 17,496.82, its lowest since April.

Nvidia's m-cap at the close of the market hours stood at $2.91 trillion. In comparison, Microsoft remained at the top with m-cap of $3.33 trillion, followed by Apple whose m-cap stood at $3.19 trillion.

Sharp reversal

Nvidia's retreat from the top spot marked a sharp 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.

Bulls still upbeat

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.