Nvidia’s Rollercoaster Ride: Market Correction Looms
In the tumultuous realm of stock markets, the high-flying Nvidia Corp. (NVDA) has recently hit turbulent winds, experiencing a correction following a sharp over-2% decline on Tuesday. Market maven Gene Munster from Deepwater Asset Management lent his insights to this unfolding drama in a recent CNBC interview.
A Rally Gone Cold?
Tuesday’s market saw Nvidia plunging to an intraday low of $830.22, marking an 11.22% pullback from a recent high of $935.10 registered on March 25. This retreat signifies Nvidia’s first correction since late October 2023, a period marked by tumultuous fluctuations leading to a remarkable rally, as highlighted by a CNBC presenter.
Munster, shedding light on the stock’s journey and his firm’s strategy, mentioned that Deepwater Asset Management’s flagship Titan fund is presently steering clear of buying Nvidia shares. Nevertheless, the firm is vigilantly monitoring the market for opportunities, foreseeing a potential pullback as Nvidia gets ready to unveil its quarterly report.
Reflecting on Nvidia’s prior movements, Munster highlighted a 9% drop in the stock price two weeks before the January quarter report, further plummeting post-earnings only to stage a remarkable 57% recovery over the past three months. Munster remarked on this seesaw nature of the stock, acknowledging the volatility within Nvidia’s realm.
The AI Conundrum
The pivotal question, as per Munster’s astute observation, revolves around the market’s faith in the transformative power of artificial intelligence. Munster pondered, “Will AI prove to be as monumental as projected – surpassing the internet and personal computers combined?” If so, he contended, Nvidia stands to experience accelerated growth over the forthcoming two to five years.
Munster juxtaposed Nvidia against energy firms fuelling data centers, remarking on the impending surge in the energy sector. Despite acknowledging the promising prospects of energy companies, Munster retained confidence in Nvidia’s prowess, emphasizing its enduring multi-year lead in the chip domain. The tech sage underscored the transitional phase underway, emphasizing Nvidia’s position in the evolutionary AI journey.
In Munster’s perspective, the trajectory is clear – from the application phase to industrial implementation, ultimately reaching the realm of governments. This evolutionary roadmap, according to Munster, indicates a prolonged growth phase for Nvidia, propelling the company ahead of the curve.
Market Performance
As Tuesday’s closing bell rang, Nvidia marked a 2.04% dip, settling at $853.54, according to Benzinga Pro data. Despite the recent pullback, the stock has soared over 72% since the start of the year, showcasing resilience amidst market fluctuations.
As the battle for Nvidia unfolds amidst market corrections and technological upheavals, investors remain poised at the edge of their seats, waiting to witness the next move in this riveting saga of growth and transformation.
