Nvidia Rebounds Over 6% After $550B Market Cap Loss

Nvidia Corporation NVDA gained over 6% on Tuesday after losing a staggering $550 billion in market value since Thursday, June 20. The company had become the most valuable on the planet last week when it reached a market capitalization of $3.46 trillion.

The artificial-intelligence company has risen back to $3.10 trillion by Tuesday after falling 16% since Thursday, settling in as the third most valuable corporation behind Microsoft Corporation MSFT, which is valued at $3.34 trillion, and Apple Inc. AAPL, which holds $3.22 trillion in value.

Concerns about Nvidia's grip on the S&P 500 Index after soaring almost 140% this year have some analysts warning that a large enough sell-off for the chipmaker could spark a broader market slump, the Financial Times reported.

Also read: Nvidia Stock Drops Over 12% In 3 Trading Days: Indicators Suggest What’s Next

"If Nvidia corrects pretty hard in the coming months, it becomes very difficult for the [S&P 500] to keep rising," Barry Bannister, chief equity strategist at Stifel, told FT. “And Nvidia will decelerate.”

Shares fell 4% on Monday, following disclosures on Friday that chief executive and co-founder, Jensen Huang, sold almost $95 million worth of the stock in the days around its climb to the world's most valuable company. The trades were part of a previously scheduled Rule 10b5-1 sale plan set up in March, filings show, according to the Financial Times.

Nvidia's fall from Thursday, June 20, to Tuesday has weighed on the broader chipmaking sector, with the PHLX Semiconductor Index SOX down 2.5% and the Invesco QQQ Trust QQQ, which tracks the tech-dominated Nasdaq Composite, was down 0.4% since Thursday.

On Tuesday the iShares U.S. Technology ETF IYW gained 1.7%, Fidelity MSCI Information Technology Index ETF FTEC jumped1.4% and First Trust Dow Jones Internet Index Fund FDN rose by 1.4%.

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