Nvidia share price rallied nearly 7% on Tuesday, witnessing a technical bounce back after three days of consecutive losses that wiped out $430 billion from the artificial intelligence chipmaker’s market value.
Nvidia shares ended 6.8% higher at $126.09 apiece on June 25 after losing 13% from June 18 close of $135.58. The drop followed a rally in Nvidia shares seen after a 10-for-1 stock split that took effect on June 10.
Read here: Nvidia stock rebounds, lifts Nasdaq higher
Last week, Nvidia briefly became the world’s most valuable company, surpassing the market value of Microsoft. The company has positioned itself as the dominant provider of chips to support artificial intelligence applications and have made it emblematic of this year’s tech-driven boom in US stocks.
Nvidia stock price is up 154% this year and has accounted for nearly 30% of the S&P 500’s year-to-date return as of Monday’s close, according to S&P Dow Jones Indices, Reuters reported. The index has rallied 14.6% this year.
Analysts believe the recent selloff in Nvidia shares has helped ease some worries about the company’s valuation. Nvidia’s market value has dropped to around $3.1 trillion from a high of about $3.3 trillion earlier this month.
Nvidia call options outnumbered puts by 1.4-to-1 over the last three sessions, Reuters reported, quoting Trade Alert data. That compared to a call-to-put ratio of 1.6-to-1 for the prior 10 sessions.
Nvidia had reported blockbuster first quarter earnings, with profit and revenue soaring amid surging demand for the company’s chips for AI applications.
The company’s profits and revenues jumped by 628% and 268% respectively, compared to the corresponding period in 2023. Nvidia’s net income surged to $14.88 billion in the first quarter, which ended April 28, and it is up more than sevenfold from $2.04 billion a year earlier. Revenue tripled to $26.04 billion from $7.19 billion in the previous year’s quarter.
(With inputs from Reuters)