What's Going On With Nvidia Stock On Tuesday?

Nvidia Corp NVDA has seen a significant drop in its stock price after briefly becoming the world's most valuable company last week. The decline has also affected other tech companies linked to the AI boom, CNBC reports.

Super Micro Computer Inc SMCI, which sells servers equipped with Nvidia's AI chips, fell 8.7%, and Dell Technologies Inc DELL, a competitor in that market, saw a 5.2% decline. Arm Holdings Plc ARM, a chip designer, dropped 5.8%, and semiconductor giants Qualcomm Inc QCOM and Broadcom Inc AVGO fell 5.5% and 3.7%, respectively.

Also Read: Nvidia Dominates GPU Market as Generative AI Adoption Grows, Analyst Says

On Monday, Nvidia was the fourth-biggest loser in the S&P 500, while Super Micro remains up almost 200% in 2024. However, the stock is recovering today.

Wall Street experts, including Hightower's Stephanie Link and Constellation Research founder Ray Wang, don't think the party is over. They expect Nvidia's performance to continue for 18-24 months and noted it as an excellent time to buy the dip.

Meanwhile, U.S. and Chinese geopolitical tensions are intensifying, which could be bad news for semiconductor stocks.

The Biden administration is investigating China Mobile, China Telecom, and China Unicom over concerns that these companies could provide American data to Beijing through their U.S. cloud and internet businesses. Authorities at the Commerce Department have subpoenaed the state-backed companies, Reuters reports.

Despite being barred from providing telephone and retail internet services in the U.S., these companies still offer cloud services and route wholesale internet traffic.

Price Action: NVDA shares traded higher by 2.98% at $121.63 premarket at the last check on Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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