Nvidia investors have been on a rocket ride to the stars. But recently they have come back down to Earth, and it has become more of a roller coaster ride.
Benefiting significantly from the artificial intelligence surge, Nvidia’s market cap has increased approximately ninefold since late 2022 – a massive market cap gain.
However, after achieving a peak in June 2024 and momentarily claiming the title of the world’s most valuable public company, Nvidia then experienced close to a 30% decline in value over the subsequent seven weeks, resulting in an approximate $800 billion loss in market capitalisation.
Currently, the stock is experiencing a rally, bringing it within approximately 6% of its all-time peak. The chipmaker surpassed the $3 trillion market cap milestone in early June 2024, aligning with Microsoft and Apple. The question remains whether the company can reclaim and sustain that title.
Investors are closely monitoring Nvidia’s forecast for the October quarter, with the company anticipated to report a growth of approximately 75%. Positive guidance would imply that Nvidia’s affluent clients continue to invest heavily in AI development, whereas a lacklustre forecast might suggest that infrastructure investment is becoming excessive.
Should there be any signs of diminishing demand for AI or if a major cloud customer is reducing spending, it could lead to a notable decline in revenue.