why Nvidia lost his crown

Shocking 3 Reasons Why Nvidia Lost Its Crown as World’s Most Valuable Company

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Why Nvidia lost its crown as the world’s most valuable company is a story of rapid stock movement and market volatility. The semiconductor giant’s stock plummeted by 6.7% over two days, resulting in a $200 billion market value loss and positioning Apple and Microsoft ahead in market capitalization.

Nvidia, the semiconductor giant, has experienced a significant downturn, with its shares plummeting by 6.7% over the past two days. This decline has resulted in a loss of over $200 billion in market capitalization, causing the company to lose its position as the world’s top stock.

As of Friday, Nvidia’s market capitalization was approximately $3.1 trillion, placing it behind Apple at $3.2 trillion and Microsoft at $3.3 trillion.[1][2].

Shocking 3 Reasons Why Nvidia Lost Its Crown

The rapid shift in fortunes marks a stark contrast to earlier in the week when Nvidia surged ahead of its megacap counterparts to claim the top spot.

Despite traders citing no fundamental reasons for the sudden sell-off towards the end of the week, it highlights the breakneck speed at which the stock had been climbing, nearly tripling in value in the past year, thus leaving it susceptible to swift downturns like the recent one[1][2].

1. Nvidia’s Meteoric Rise Made It Vulnerable to Profit-Taking

Nvidia’s stock price has nearly tripled this year, significantly contributing to the broader market’s gains. This rapid ascent made the stock vulnerable to sudden drops, as investors took profits after the company’s blistering run[1][2].

2. Broader Market Pullback and Triple-Witching Session Contributed to Volatility

The decline in Nvidia’s stock coincided with a broader market retreat during a triple-witching session, where options expire simultaneously, S&P Dow Jones Indices adjust company weightings, and ETFs tracking these indices make corresponding changes. Such events can trigger market volatility, impacting individual holdings[1][2].

3. Nvidia’s Fundamentals Remain Strong Despite Short-Term Volatility

While some short-term volatility was anticipated, analysts believe “any volatility is likely short-lived” despite acknowledging the stock’s vulnerability to profit-taking. They maintain their buy rating, $150 price target, and top pick designation for Nvidia[1].

Bullish sentiment persists, with Melius Research analysts raising their price target to $160 from $125, marking their fifth increase this year.

They argue that Nvidia is “better positioned than some SaaS ‘leaders’ who haven’t proven AI’s impact,” suggesting Nvidia could capture a larger share of the enterprise software market[1].

Shocking 3 Reasons Why Nvidia Lost Its Crown as World’s Most Valuable Company

FAQ

What caused Nvidia to lose its position as the world’s most valuable company?

Nvidia lost its position due to a sharp decline in its stock price, which fell over 6% in the past two trading days, resulting in a loss of more than $200 billion in market value[1][2].

Is Nvidia’s loss a cause for concern?

No, analysts believe Nvidia’s fundamentals remain strong despite the short-term volatility. The decline is seen as a correction following the stock’s rapid ascent, which made it susceptible to sudden drops[1].

What is the current market cap of Nvidia, Apple, and Microsoft?

As of Friday, Nvidia’s market cap is approximately $3.1 trillion, just behind Apple’s $3.2 trillion and Microsoft’s $3.3 trillion.[1][2].

Conclusion: Reasons Why Nvidia Lost Its Crown

Nvidia‘s loss of the world’s most valuable company title is a temporary setback, as the company’s fundamentals remain strong. The decline is attributed to a correction following the stock’s meteoric rise and broader market volatility. Analysts remain bullish on Nvidia’s prospects, particularly in the enterprise software market, where they believe the company is well-positioned to capture a larger share.

Shocking 3 Reasons Why Nvidia Lost Its Crown as World’s Most Valuable Company

Nvidia’s recent loss of its title as the world’s most valuable company is primarily a result of a swift correction following an unprecedented rise in its stock price. The drop coincided with broader market volatility, particularly during a triple-witching session, which amplified the impact on Nvidia’s stock. Despite this setback, analysts maintain a positive outlook on Nvidia, citing its strong fundamentals and potential in the enterprise software market.

They believe the current volatility is temporary and continue to endorse Nvidia as a top investment choice. This confidence is reflected in upward revisions of price targets by multiple analysts, underscoring their belief in Nvidia’s long-term growth prospects and resilience. Thus, while the recent decline is noteworthy, it does not fundamentally alter the promising trajectory that has positioned Nvidia as a key player in the tech and AI sectors.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research and consult with a financial advisor before making any investment decisions.

References:
[1] https://trytako.com/embed/GSBSQQ/

[2] https://timesofindia.indiatimes.com/technology/tech-news/how-nvidia-dropped-from-the-worlds-no-1-most-valuable-company-to-no-3-behind-microsoft-and-google/articleshow/111211404.cms

https://fortune.com/2024/06/21/nvidia-market-cap-world-most-valuable-company-nvda-stock-selloff/

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