According to the app of Wise Finance, Nvidia's stock price experienced a drastic fluctuation on Monday, June 24, with a single-day plunge of 6.7%, marking its largest drop in two months. This is the third consecutive day of decline, causing the company's market cap to shrink sharply by more than $220 billion from its peak of $3.34 trillion on June 18. Currently, its market cap has fallen below the threshold of $3 trillion. Technically, Nvidia has formally entered a callback state, dropping more than 10% from its recent closing high. It is reported that Nvidia briefly topped the "World's Number One Market Cap" on June 18. However, after the stock's market cap reached the top, investors have chosen to take profits, and the CEO Huang Renxun has also begun to sell shares.

According to documents disclosed by the U.S. Securities and Exchange Commission, Huang Renxun plans to sell 120,000 common shares worth about $16.3049 million on June 20. Over the past five trading days since June 13, Huang Renxun has cumulatively reduced his holdings by 600,000 shares, cashing out more than $79 million, equivalent to more than RMB 570 million. Nevertheless, these sold shares only comprise a small portion of Huang Renxun's total holdings. As of March 25, Huang Renxun held more than 90 million shares of Nvidia.

Meanwhile, other Nvidia executives are also cashing out shares. CFO Colette Kress sold $12.7 million worth of stock. Executive Vice President Deborah Shoquist sold 41,140 shares on June 3, cashing out more than $45 million. Other executives such as Dawn Hudson, Tench Coxe, John Dabiri, Michael McCaffery, Brooke Seawell, and Mark Stevens have also sold varying amounts of stock in recent weeks.

According to data compiled by Washington Service, Nvidia executives and directors have cumulatively sold more than 770,000 shares, cashing out more than $700 million, or about RMB 5 billion, to date, excluding the impact of the 1-for-10 stock split on June 10. Since Nvidia released its first quarter results in May 2018, more than one-third of insiders have chosen to reduce their holdings.

What is the future of Nvidia's stock price after the callback?

Jonathan Krinsky, chief market technician at BTIG, said on Monday that Nvidia has entered the "unknown territory" and become one of the largest companies in the United States. Although the stock price has dropped for three consecutive days, Nvidia's year-to-date increase remains at 138%, the best performance in the S&P 500 index.

This month, Nvidia briefly surpassed Microsoft and Apple to become the company with the highest market cap. The stock price of this AI chip maker has increased by about 100% compared with its 200-day moving average. Krinsky pointed out that since 1990, the maximum percentage that the stock price of a U.S. company has exceeded its 200-day moving average when the company's market cap tops the charts was 80%, set by Cisco in March 2000.

Krinsky emphasized other market data points. Although the fundamentals are very different, Nvidia's stock price has risen about 4,280% in the past five years, while Cisco rose about 4,460% in the five years before hitting its peak. In the past 18 months, Nvidia's increase has been 827%, twice the increase within 18 months for Cisco in 2000.

More broadly, the inflows for large tech/growth funds, including Vanguard Growth ETF, SPDR Technology Select Sector ETF, VanEck Semiconductor ETF, and Vanguard Large-Cap Growth ETF, hit a historical high last week. "This feels like a sign of what we go through after a bubble," Krinsky said.

The NASDAQ 100 index has not seen a drop of 2.5% or more for 379 trading days, the longest continuous decline record since 1985.

Krinsky said: "We are still concerned that many of the leaders this year will dissolve in the short term." However, even among the so-called "Magnificent Seven" stock groups, he sees diversification and constructive trends in the performance of stocks such as Amazon and Google without excessive expansion.

Next week, the market will enter trading in July. July is a well-known bullish month, and the Invesco QQQ Trust ETF has not seen a loss in July since 2007.

"If there is no meaningful callback this week, then it will be difficult for us to see further strength in July, as it looks like part of the trend has already been brought forward," Krinsky said.

In contrast, investment bank Jefferies holds an optimistic view of Nvidia's stock outlook, raising its target stock price from $135 to $150 while also increasing its valuation of the AI chip maker. Jefferies gives Nvidia a "buy" rating, demonstrating confidence in the company's future development.

The team led by Jefferies analyst Blayne Curtis, including Fubon analyst Sherman Shang, noted the mixed performance of AI stocks over the past month. Despite equally impressive performances by Broadcom (AVGO.US) and Nvidia, investors have a stronger bearish sentiment toward AMD (AMD.US) and Marvell Technology (MRVL.US), hoping to gain more investment opportunities in the Edge AI/Mobile sector.

Analysts believe that although it is currently too early to predict the market landscape for 2025, they have indeed noted the growing concern for AMD's product line in the market. However, Nvidia still maintains its leading position in the industry while also shaping the market. For example, analysts have seen Marvell and Astera Labs (ALAB.US) grow with Nvidia, but also point out that Nvidia's decisions on each generation of products may substantially change the market landscape.

Jefferies analysts have just finished a week-long marketing campaign with Mr. Shang and plan to meet with the management teams of Nvidia, Broadcom, Marvell and Astera during this week's AI bus tour. They started this visit because they wanted to see Nvidia's GB200 NVL firsthand and ask questions about the company's advantages on the platform, while also exploring the significance of this transformation for the entire ecosystem.

Curtis and his team highlighted the positive factors they found in Nvidia's supply chain during their Asian trip in mid-May. They also noted that Nvidia is requesting a 25% increase in capacity by the second half of 2024, with Blackwell (Nvidia's graphics processing unit microarchitecture) expected to increase capacity by about 40%.

In previous checks, analysts updated these trading volumes, but did not reflect this upward trend in their estimates because they hoped to further verify the accuracy of this data and determine how these changes affect the GB200 NVL.

After additional checks and in combination with the feedback of the Fubon team, Jefferies now finds that the trading volume of GB200 NVL is 60,000 (higher than the previous 40,000), and all trading volume of NVL 36 has increased (NVL 36 is 50,000, NVL 72 is 10,000).

Analysts also added that even taking into account these higher numbers, their forecasts are still more than $50 billion below the bottom-up estimates for the 2025 fiscal year.

Jefferies has a positive long-term view on Nvidia: analysts say that industry checks indicate that the company has further upside potential, and with the growth of Blackwell, the performance of the 2026 fiscal year is expected to accelerate.

Analysts believe that with the popularization of GB200, system sales will increase, further enhancing Nvidia's competitiveness.

Jefferies analysts have now raised their already above-Wall Street expectations for the 2025 fiscal year revenue/eps to $124 billion/$2.82 and $181 billion/$4.23 respectively for the 2026 fiscal year. This series of predictions and actions indicates that Jefferies is confident in Nvidia's future and expects the company to continue to maintain its leading position in the field of AI and chip manufacturing.