New York, September 7 (Xinhua) -- Global chip giant NVIDIA Corporation's stock price momentum has significantly weakened since its quarterly report on August 28 triggered negative market reactions, with a cumulative decline of nearly 20%. The significant correction in Nvidia's stock price highlights the market's concerns about the uncertainty of Nvidia's future prospects, driving the stock market to weaken and casting a shadow over the global chip market and the US economy.
Among them, Nvidia's stock price fell 4.09% on the 6th, making it the worst weekly performance in two years, and also dragging down the S&P 500 index by 1.73% on the same day, making it the worst weekly performance since March 2023. The company's market value has shrunk by $406 billion in just the past week, surpassing the combined market value of its two competitors, AMD and Qualcomm, and dropping to around $2.5 trillion.
Since entering the artificial intelligence chip market, Nvidia's stock price has soared significantly, with a market value exceeding $3 trillion this year. However, with the overall changes in the US economy and technology industry, investors have begun to question Nvidia's high valuation.
Some investors believe that despite Nvidia's strong performance in the field of artificial intelligence, its growth prospects and market value are questionable. Especially the market believes that although the US economy is still performing strongly, multiple signs suggest that economic growth may be slowing down. The decline in Nvidia's stock price also reflects to some extent the market's pessimistic expectations for future global economic demand, especially in the context of the chip industry's high dependence on global supply chains and market demand. Any economic slowdown could lead to further reduction in chip demand.
In this situation, Nvidia itself is also facing a series of challenges, including the delayed release of its new product Blackwell and pressure on gross profit margins, which have a negative impact on the company's short-term performance due to fundamental factors. The recent media reports that the US Department of Justice may conduct an anti-monopoly investigation into Nvidia's market dominance in the field of artificial intelligence chips have brought regulatory risks to the company.
In addition, Nvidia is facing increasingly fierce competition in the artificial intelligence and accelerated computing markets, not only facing competition from large listed companies, but also challenges from internal cloud projects and other private companies.
According to data submitted by Nvidia to the US Securities and Exchange Commission (SEC) on the 5th, Nvidia CEO Huang Renxun sold nearly 5.3 million shares of Nvidia's common stock worth approximately $633.1 million in the past three months. Huang Renxun started selling stocks in batches starting from June 13th, with 120000 shares per transaction. The most recent one was on June 5th, when the stock price rose by 0.94% to $107.21. However, between June 13th and September 5th, the stock price has cumulatively dropped by 17.28%. As the largest individual shareholder of Nvidia, Huang Renxun holds approximately 93.5 million shares as of March 25th, accounting for approximately 3.8% of the company's total outstanding shares.
Whether it's Huang Renxun's sell-off or the Federal Reserve's interest rate hike policy, the market is starting to reassess Nvidia's long-term growth potential. The Fed's interest rate hike will increase borrowing costs, putting greater pressure on capital intensive technology companies in terms of financing and expansion. The decline of Nvidia's share price is a direct reflection of the market's concern about the foam in technology stocks, and also indicates that the technology industry may face greater pressure in the future.
Under the multiple challenges of high inflation, high interest rates, and global economic slowdown, the decline in Nvidia's stock price is not only a response to the company's fundamentals, but also a reflection of market concerns about the overall outlook for the US economy and the global macroeconomic situation.
Mizuho Securities analyst Jordan Klein stated on the 6th that Nvidia's stock price is expected to struggle to break through $130 per share in the coming weeks. In addition to the macroeconomic data improvement brought about by the possible economic "soft landing", chip stocks as a whole are facing difficulties and are expected to further decline before rebounding.
However, some analysts still positively evaluate Nvidia's continued investment and innovation in the field of artificial intelligence, believing that the company's investment in next-generation Large Language Models (LLMs) such as GPT-5 and Llama 4 may drive further development in the AI industry.
Vivek Arya, a securities analyst at Bank of America, stated in a research report released on the 4th that despite short-term challenges, Nvidia's long-term growth potential and market leadership position are still highly regarded by the market. Ariya believes that the volatility of Nvidia's stock price provides investors with an attractive buying opportunity, especially when the company's valuation is at a historical low. He emphasized that Nvidia's continued investment and innovation in the field of artificial intelligence are key to the company's long-term growth.