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Nvidia (NVDA) stock fell 11% overnight, continuing the market’s downward trend. The shares were fighting to hold $94 before the market opened, after closing Friday at over $107.
Market Impact
- Broad Market Decline:
- The Nasdaq average dropped nearly 6%.
- The S&P 500 fell nearly 4.5%.
- The Dow Jones average was down over 3%.
- Japan’s market fell 12.4%, erasing its gains for the year.
Nvidia’s Market Position
- Market Capitalization:
- Nvidia’s market cap dropped to $2.35 trillion, down from over $3 trillion less than a month ago.
- The stock is trading at 19 times its estimated fiscal 2025 sales of $120 billion.
- Volatility and Reassurance:
- Chicago Federal Reserve President Austan Goolsbee’s comments that the Fed will “fix it” if the economy falters reassured markets before their 9:30 a.m. opening.
Upcoming Earnings
- Earnings Release:
- Nvidia is set to release its second-quarter earnings on Aug. 28.
- Analysts expect revenue of $28.5 billion and earnings of 64 cents per share.
Analyst Expectations
- Price Targets:
- Analysts had previously set a price target of $144 per share for Nvidia, which would represent a significant gain from current levels.
Recent Developments
- Department of Justice Probe:
- A probe into Nvidia’s purchase of Run.ai contributed to a 7% drop in its stock on Aug. 2.
- Positive News:
- Meta Platforms (META) plans to have 350,000 Nvidia H-100 chips online by the end of the year.
- Nvidia is building generative AI models based on Meta’s Llama 3.1 Large Language Model (LLM).
Nvidia’s AI Market Dominance
- Software and Hardware:
- Nvidia’s dominance in the AI market is supported by its Cuda software, which has become a de-facto industry standard.
- The company has also developed application program interfaces (APIs) on top of it.