(Bloomberg) — Nvidia Corp. is headed toward the biggest one-day drop in seven months as traders take profits following a rally that saw the stock gain more than 19% in six consecutive trading days.
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The chipmaker’s shares were down 4.8% Friday, which if sustained would be the biggest decline since Aug. 2. In a sign of how far Nvidia has rallied this year, the relatively small drop at one point erased more than $140 billion in market value, which would rank among the biggest single-day value destructions in US stock market history.
Nvidia shares have soared this year amid rising optimism that demand for its chips used in artificial intelligence computing will remain robust. Even after Friday’s decline, the stock is up more than 70% in 2024. With a market value of $2.2 trillion, Nvidia is the third biggest company in the S&P 500 after Microsoft Corp. and Apple Inc.
Earlier in the session, Nvidia shares gained as much as 5.1%, pushing a momentum indicator to the highest since November 2021, signaling the stock was ripe for a pullback. The relative-strength index climbed above 85 on Friday, the highest since November 2021, before dropping to around 70 as of 2 p.m. in New York.
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Jessica Roberts is a seasoned business writer who deciphers the intricacies of the corporate world. With a focus on finance and entrepreneurship, she provides readers with valuable insights into market trends, startup innovations, and economic developments.
