Nvidia Corp.’s stock has been nearly invincible lately, showing significant gains day after day. However, the stock faced a remarkable turnaround on Friday, moving from a 5.1% increase in the morning to a 3.9% loss in recent trading.
Market Analysts Explain the Shift
According to Mizuho Securities analyst Jordan Klein, the sudden reversal in Nvidia’s stock price is attributed to what he calls “exhaustion.” Klein highlights that semiconductor stocks, including Nvidia, have been overbought recently, leading to a cascade effect where quant machines start selling, followed by retail investor concerns.
Klein stresses the importance of recognizing that stocks like Nvidia cannot sustain constant upward momentum indefinitely, cautioning investors against expecting daily gains like those seen recently.
Mixed Performance Across Chip Sector
While chip giants such as Broadcom Inc. and Marvell Technology Inc. faced declines following their recent earnings reports, other players like Advanced Micro Devices Inc. and Super Micro Computer Inc. experienced positive momentum after market open.
However, the broader chip sector took a hit mid-morning, with only a few companies showing gains. As a result, the PHLX Semiconductor Index was down 3% in midday trading.
Impact on Market Indices
Nvidia’s stock performance had a significant influence on the S&P 500 earlier in the day, accounting for nearly half of the index’s gains. Despite this, the S&P 500 and Nasdaq Composite index both saw declines by midday, underscoring the volatile nature of the current market conditions.
