Nvidia’s Rollercoaster Ride: Stock Falls 4% Following Record Break

Nvidia (NVDA) has experienced a volatile midday trading session, with its stock price dropping by $6.61, or 4.42%, to $142.82. This downturn came despite an initial 2.5% rise at market open, where shares set a new intraday record of $153.13. The previous session had seen Nvidia’s shares soar more than 3% to a record closing price of $149.43, surpassing its earlier record close from November.

The movement in Nvidia’s shares was closely tied to the announcements made by CEO Jensen Huang at the Consumer Electronics Show (CES) in Las Vegas. Huang unveiled a series of AI-driven innovations, including tools for AI agents and significant updates to the company’s robotics initiatives. Among the highlights was the introduction of Nvidia’s next-generation RTX Blackwell GPUs, aimed at gamers, with pricing set between $549 and $1,999.

Perhaps the most intriguing announcement was Project DIGITS, described as a personal AI supercomputer capable of handling AI models with up to 200 billion parameters, outstripping capabilities like those of OpenAI’s GPT-3. This device, developed in collaboration with MediaTek (2454), is targeted at AI researchers and developers and is slated for release in May at a starting price of $3,000. The news positively affected MediaTek’s stock, which saw a 4.6% increase by market close.

The market’s reaction to these announcements has been mixed, with an initial positive response giving way to profit-taking or perhaps skepticism regarding the immediate financial impact of these advancements. Bank of America (BAC) analyst Vivek Arya, however, maintained an optimistic view, reiterating a “buy” rating on Nvidia’s stock. Arya described CES as a “positive catalyst” for Nvidia but expressed caution about how quickly these new technologies would translate into financial gains, particularly regarding Nvidia’s robotics strategy.

Despite the day’s decline, Arya’s commentary on Tuesday affirmed Nvidia’s continued dominance in AI computing and ecosystem development, reinforcing the bank’s stance on Nvidia as their top pick. This perspective suggests that while short-term market reactions might be volatile, the long-term outlook for Nvidia remains strong, driven by its innovative product pipeline and strategic expansions into new AI and robotics markets.

It’s worth noting that Nvidia remains a ‘Sector Top Pick’ for BofA in 2025, even following the stock’s impressive 180% rally last year.

The performance of Nvidia’s stock encapsulates the high expectations and the inherent risks associated with cutting-edge technology companies where market sentiment can swing dramatically based on product announcements and perceived future growth prospects.

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