Nvidia ( NVDA ) stock fell more than 6% to close at $118.11 per share on Monday as investors pulled out of the year’s hottest AI game. The session marked the third straight day of losses for shares of the chip heavyweight.
The stock is down more than 12% from its all-time high of $135.58 last Tuesday, as Nvidia’s market cap temporarily dethroned Microsoft ( MSFT ) as the most valuable company.
The chipmaker has since returned the crown with a market cap of about $2.9 trillion, below Microsoft and Apple’s (AAPL) valuations of more than $3 trillion each.
Through Thursday of last week, Nvidia played a crucial role in pushing the S&P 500 (^GSPC) and the Nasdaq (^IXIC) to repeated record highs in 2024.
The Santa Clara, California-based company completed a 10-for-1 stock split on June 10.
As Yahoo Finance’s Allie Canal recently reported, Wall Street is divided on whether the recent sell-off is a sign of long-term concerns about the stock.
‘The stock’s steep climb makes it vulnerable to profit taking, but we argue there is volatility [is] likely to be short-lived,” Bank of America analysts said in a note last week, reiterating a buy rating and $150 price target while calling Nvidia a “top pick.”
Over the weekend, Jefferies analysts maintained a buy rating on the stock and raised their price target from $135 to $150, calling Nvidia the “king and kingmaker.”
Meanwhile, Patrick Moorhead, founder and CEO of Moor Insights & Strategy, told Yahoo Finance on Friday that investors should be alert to signs that a pullback is here to stay.
While he doesn’t see the status quo of Nvidia’s dominance changing in the next six to nine months, investors should focus on “the downstream profitability that people in the ecosystem are making or not making.”
“These are the software companies like Adobe, Salesforce, SAP and ServiceNow. Because if those companies and those consumers stop paying for these new AI features, then this whole gravy train will come to a halt, as we saw in the dotcom crisis,” he explained.
Correction: An earlier version of this article misstated the valuations of Microsoft and Apple, which were in the billions. Both companies have market capitalizations of more than $3 trillion. We regret the error.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X @ines_ferre.
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