Nvidia, one of the most talked-about stocks in the U.S., is experiencing a sharp drop that may signal brewing risks. This tech giant, which has seen its popularity surge alongside the boom in artificial intelligence, has now surpassed even Bitcoin in terms of volatility. On Tuesday, Nvidia’s stock price plummeted 7%, marking its steepest decline in over three months and wiping out $193 billion in market value.
The recent downturn—Nvidia’s stock has fallen 23% since July 10—underscores a significant risk that was largely overlooked during its meteoric rise: its volatility. By one key indicator, Nvidia’s volatility is nearly double that of Bitcoin.
Despite this month’s pullback, Nvidia’s stock is still up about 109% this year, outperforming every other stock in the S&P 500 except Super Micro Computer Inc., another company benefiting from the AI investment wave. However, in the past two weeks, investor sentiment has shifted. Skepticism about the profitability of AI investments has led to a broader retreat from large technology stocks like Nvidia. Investors are now turning their attention to small-cap stocks with lower valuations, anticipating gains when the Federal Reserve eventually cuts interest rates.
This shift in investment strategy has pushed Nvidia’s stock to a critical threshold, according to technical analysts who monitor trading patterns. The stock closed at $103.73 on Tuesday, just below its 100-day moving average of $103.81—a level that could indicate further declines ahead.
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