Deepwater Asset Management’s managing partner Gene Munster remains bullish on the transformative potential of AI, even as Nvidia Corp.’s NVDA market cap nosedived by nearly $300B, dragging Nasdaq down by over 3%.
What Happened: On Tuesday, Munster took to X, formerly Twitter, and said that he still believes in the long-term impact of AI, despite the short-term market fluctuations.
He first commented on the unfortunate timing of his earlier statement during an appearance on CNBC, where the analyst said that tech stocks would likely continue to rise in September.
However, the Nasdaq ended up dropping 3.3% on the same day — a rare occurrence, as it was only the eighth time in the last 500 trading days that the index declined by more than 3%, Munster noted.
“Shame on me for trying to predict what the market will do in the near-term. That said, the fundamentals of AI are most important to what the market does over the next 3-5 years,” he posted.
“I continue to believe AI will have a bigger impact on our lives and on investing than the internet.”
Why It Matters: The plunge in Nvidia’s market cap comes after the company’s second-quarter earnings report in which it exceeded expectations on earnings and revenue, yet investors pulled back afterward – its stock price fell about 10% in a single day, resulting in a loss of $300 billion from the chipmaker’s market capitalization.
This was part of a broader market downturn, with the Dow Jones sliding 1.5% and the Nasdaq pulling back 3.3%.
On the same day, the Jensen Huang-led company also received a subpoena from the U.S. Department of Justice, as it stepped up its investigation into possible antitrust violations by the AI computing giant.
Price Action: At the time of writing, in after-hours trading, Nvidia shares have fallen by 2.41% to $105.40. The tech giant closed Tuesday’s session at $108, down 9.53%, according to Benzinga Pro data.
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