The US tech market experienced a challenging week, with Nvidia and Meta experiencing significant stock price drops. Nvidia’s stock fell by 10 percent on Friday, wiping out over $200 billion in its market value. This was the worst decline in Nvidia’s stock since March 2020. Despite impressive revenue and profit growth over the past year, Nvidia’s stock has surged more than 1,600 percent in the last five years.
Tech stocks overall had a tough week, with Meta experiencing a 4.13 percent drop in its stock price and the Nasdaq 100 index declining by 6.09 percent on Friday alone. The Nasdaq Composite index also saw a decline of 2.87 percent over the week, with expectations about interest rate cuts playing a significant role in market volatility.
Investors had initially anticipated multiple interest rate cuts early on but now expect the first cut to occur in November. This shift has made investors nervous and contributed to the ups and downs in the market. Overall, this downturn raises concerns about the future of high-flying US tech stocks, and investors are closely monitoring developments in interest rates and other economic indicators to assess their stability and future performance.
Nvidia is known for designing processors used in data centers running artificial intelligence models, which have been at the forefront of recent technological advancements. Over the past year, the company has reported impressive revenue and profit growth leading to a substantial increase in its stock price.
Nvidia’s stock surge has been driven by several factors such as increasing demand for AI-based solutions across various industries like healthcare, finance, gaming, and more.
The decline in Nvidia’s stock price was unexpected as investors were optimistic about its continued growth potential due to its dominant position in AI computing solutions.
In conclusion, last week’s challenges for US tech stocks were mainly caused by fears about interest rate cuts that affected investor confidence leading to fluctuations in their share prices. While expectations around interest rates are uncertain for now, investors will be closely monitoring developments to determine how they may impact future performance of these high-flying stocks such as Nvidia which have shown tremendous growth over the past few years.
