Nvidia’s GPUs power the AI software behind OpenAI’s wildly popular ChatGPT program. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool has positions in and recommends Alphabet and Nvidia.

AMD vs NVDA: Battle of the Semiconductors

Though significant insider selling sometimes points to overvaluation, the general market attitude is positive. As part of a pre-announced trading strategy, Nvidia’s Chief Executive Officer Jensen Huang has sold shares, so it would not be necessary to see this as a negative indication. Several other pullbacks of 10% or more occurred during Nvidia’s first year on the market. Between late 2001 and October 2002, shares of the graphics processing unit (GPU) maker plunged nearly 90%. Nvidia didn’t climb back to its previous high until December 2006. Investment flows into mutual funds and exchange-traded funds reinforce the degree to which large technology stocks have dominated the U.S. stock market this year—that is, until this month’s well-docum…

Look to Nvidia’s future instead of its past

Nvidia came into a bit of trouble after a report from Citron research at the end of 2016 said the company wasn’t actually gaining new business, just stealing market share from its rival, AMD. Nvidia stock price quickly recovered however, and continued to march higher. Still, stocks don’t climb non-stop forever, and Nvidia has shown us that in recent weeks. The company completed a stock split — a move to lower a high-flying stock price to levels more appealing to investors — on June 7, and the stock opened at its new price of about $120 as of June 10. But after rising as high as about $135, the stock has slipped 16% — and today is trading below its post-split opening price.

Financial Calendars

Analysts predict that today’s $200 billion market will reach beyond $1 trillion by the end of the decade. Given its large market cap, Nvidia is among the top five holdings of the five largest ETFs by assets under management (AUM). The SPDR S&P 500 ETF Trust (SPY -0.51%) owns the most shares and has a meaningful portfolio weighting among the biggest ETFs. That makes it a solid option for investors seeking exposure to Nvidia.

Vultr and Run:ai Deliver Advanced NVIDIA GPU Orchestration for AI/ML Workloads Worldwide

1. The first one came only days after its initial public offering.
2. The LLMs then can go on and do their job of solving complex problems — and this is something that’s helping Nvidia customers gain in efficiency and develop new products.
3. Well, after carrying the stock market over the first six months of the year, Nvidia is in the midst of a correction.
4. That significantly outperformed the S&P 500 (12.7% average annual return).
5. It was also awarded an Emmy award for the potential it helped unlock in the entertainment industry.

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Semiconductors Industry Comparables

Some could argue that Nvidia’s valuation makes things different now than in the past. Shares of NVIDIA split on the morning of Monday, June 10th 2024. The newly minted shares were distributed to shareholders after the market closes on Monday, June 10th 2024. An investor that had 100 shares of stock prior to the split would have 1,000 shares after the split.

The company was intended to focus on chips for the budding gaming and entertainment industry that was spawned by the rise of the personal computer and the Internet. At the time of its founding, there were less than 30 graphics-focused independent operators and that figure would more than double over the next few years. NVIDIA Corporation ranks among the world’s leading microchip manufacturers and is best known for its contributions in the fields of graphics and gaming. Its chips and related software power the fastest, highest-resolution graphics and are featured in a line of products that include solutions for all end-market uses. Along with gaming, NVIDIA microchips are used in visualization, datacenter, AI, and autonomous vehicles just to name a few.

The company’s investments in accelerated computing positioned it to capitalize on the enormous potential of AI, igniting its earnings and stock price. Nvidia believes it’s still in the early innings of the AI boom, which could make it a great long-term investment. Some investors would rather avoid the volatility, and they look to be selling Nvidia stock again today.

Moreover, Nvidia’s partnership with Chinese companies to provide AI chips assures continuous development. Nvidia will soon launch new chips https://www.1investing.in/ based on its Blackwell architecture. CEO Jensen Huang believes Blackwell will be the company’s “most successful product” in its history.

And it is unclear where this data will come from, considering that many quality sources have already been tapped. I’m not sure how much growth the new architecture will generate for the company, but I expect it to be significant. My take is that Nvidia’s tremendous run hasn’t come to an end. Some analysts view Nvidia’s pullback as a great buying opportunity.

It’s true that investors are moving out of the large tech companies and into previously lagging small-cap stocks as they prepare for the first interest rate cuts since 2020. There has been an ongoing rotation in the stock market, and one of the losers has been previously high-flying Nvidia (NVDA -7.04%). Shares of the leading artificial intelligence (AI) chip and software maker continued to drop on Tuesday.