NVIDIA's Stock Faces Challenges Despite AI Boom

Nvidia Gets Cold Shoulder From Over Half Of This Ultra-Rich Members Network: Report - NVIDIA (NASDAQ:NVDA)

Despite its dominance in the AI industry, Nvidia Corp. NVDA is not a favored investment for over half of the members of the ultra-wealthy network, Tiger 21. What Happened: As per the network's second-quarter asset allocation report, 57% of Tiger 21 members have chosen not to invest in Nvidia. The report suggests that a majority of these members do not plan to initiate a position in the company, CNBC reported on Wednesday. Michael Sonnenfeldt, chairman of Tiger 21, explained, "While Nvidia is the undisputed leader in AI at the moment, no company's growth lasts forever, and competitors often catch up, leading to a recalibration of the market." Despite the Jensen Huang-led company's impressive growth and its $3 trillion market cap earlier this year, the stock has experienced a downturn. Furthermore, 43% of Tiger 21's members who have invested in Nvidia do not intend to add more stock, citing concerns that the stock has already peaked. See Also: Tesla Bull Ross Gerber Sets 6-Month Deadline For Elon Musk-Led EV Company To Improve Performance Or He Plans To Exit His Position: 'See The Stock As Really Overvalued' Why It Matters: Nvidia's future looked promising as it was projected to surge to a $10 trillion valuation. However, just days later, the company received a subpoena from the U.S. Department of Justice (DOJ) over potential antitrust violations, causing a drop in its stock price. This was followed by a cautionary note from Jim Cramer, advising against panic selling but acknowledging that Nvidia's stock could go lower. Price Action: At the time of writing, Nvidia was trading 2.42% lower at $105.39 during the after-hours, after closing at $108.00, according to Benzinga Pro. Read Next: Nvidia, TSMC Lead Chip Stocks Lower In Premarket: What's Going On Photo via Shutterstock This story was generated using Benzinga Neuro and edited by Pooja Rajkumari Market News and Data brought to you by Benzinga APIs

Nvidia Stock Loses The Value Of McDonald's, Disney, Coinbase Combined Since Q2 Earnings: AI Darling's Decline Continues Tuesday - NVIDIA (NASDAQ:NVDA)

A look at how the value lost translates to the value of other public companies. NVIDIA Corporation NVDA's second-quarter report was viewed of the most important earnings prints in recent memory and a gauge for how the overall stock market could perform going forward. The company beat earnings and revenue estimates, but investors retreated in the aftermath, wiping away a huge amount of valuation from the chip stock. Nvidia's Rock Star Status: Nvidia has been one of the hottest large-cap stocks over the last year, thanks to its incredible growth from the artificial intelligence sector. With high expectations and a history of beating analyst estimates, investors and analysts turned their attention to the company's second-quarter earnings report and conference call, complete with some watch parties in big cities. The company's beat and commentary were ultimately not big enough to drive the stock higher. Nvidia stock closed at $125.61 on Wednesday, Aug. 28 ahead of the earnings report. On Tuesday, shares are trading at $109.04, down 13.4% in three trading days. Based on 24.53 billion Nvidia shares outstanding, this represents a loss of $413.1 billion in Nvidia's market capitalization over the last three trading sessions. For comparison, that $413.1-billion drop is greater than the combined value of several of the most well-known companies worldwide: McDonalds Corporation MCD: $204.5 billion Disney DIS: $162.1 billion Coinbase Global COIN: $42.4 billion Add the value of those three companies up and you have $409 billion, which is less than the amount of value erased from Nvidia over the last three trading days. The Benzinga Pro chart below shows the change in value for Nvidia stock over the last month. Read Also: EXCLUSIVE: Top 20 Most-Searched Tickers On Benzinga Pro In August 2024 - Where Do Tesla, Nvidia, Apple, AMD Stock Rank? Why It's Important: Nvidia shares have soared in value thanks to its impressive earnings reports, strong guidance and backlog of demand. While the second-quarter earnings report beat estimates, there were several less than positive takeaways: investors and analysts are now seeing the company beat estimates and grew revenue at lower rates than in past quarters. In essence, the beats are getting smaller and smaller. Other concerns include margins and potentially lower growth rates in upcoming quarters. Analysts were mixed in their sentiment after the earnings report, with many seeing the sell-off as a potential buying opportunity for long-term investors. For Nvidia, the rise of the stock may have been too much all at once. It was just last May that the company passed the $1-trillion market capitalization milestone for the first time. The company went on to pass the $2-trillion and $3-trillion valuation levels and for a short time this year became the most valuable company in the world at $3.33 trillion. Nvidia is expected to report third-quarter financial results in November. The question will be whether shares can recover before then and if the next earnings report will be as hyped as the recent second-quarter report. NVDA Price Action: Nvidia shares are trading at $109.04 versus a 52-week trading range of $39.23 to $140.76. Despite the short-term valuation loss, the stock is up 126% year-to-date in 2024. Read Next: EXCLUSIVE: Nvidia Dow Jones Inclusion 'A Matter Of When' -- Will It Replace Intel? Nvidia CEO Jensen Huang. Photo courtesy of Nvidia. Market News and Data brought to you by Benzinga APIs