For American investors, the recent significant fluctuations in the stock price of the "greatest stock in the universe", Nvidia, is definitely one of the headline news that cannot be ignored.

Nvidia's stock price has fallen for three consecutive days since last Thursday, with a cumulative decline of more than 13%. However, on Tuesday, Nvidia's stock price surged by 6.76%, and the single-day increase in market value was equivalent to that of two BYD companies.

For a giant company with a market value of over $3 trillion, such large fluctuations in stock prices are enough to affect the market sentiment of the entire US stock market and even the global stock market. What are the factors behind such large fluctuations, and are they related to Nvidia's shareholder meeting on Wednesday?

Nvidia's market value fluctuations have shocked the entire US stock market.

As Deutsche Bank's report this week stated, as the "Seven Giants" increasingly occupy the dominant position in the US stock market, the US stock market is "approaching the highest concentration of stocks in history."

Nvidia is obviously the absolute focus in this "highly concentrated stock market", and its ups and downs are enough to affect the market sentiment of the entire US stock market and even the global market.

Since last Thursday, Nvidia's stock price has fallen for three consecutive days, with a cumulative decline of more than 13% after hitting a high of $140 in intraday trading. The market value has evaporated more than $428 billion (about RMB 31,098 billion). For a giant company with a market value of over $3 trillion, such a large decline undoubtedly is like a "major earthquake".

However, on Tuesday, Nvidia saw a large rebound, with a single-day surge of 6.76%, which means its market value increased by $196.4 billion (approximately RMB 142.7 billion).

This is equivalent to Nvidia's market value nearly increasing by the Agricultural Bank of China (with a market value of approximately RMB 1,501.4 billion as of the publication date), or nearly two BYD companies (with a market value of approximately RMB 734.6 billion as of the publication date) in one trading day.

More of a technical impact?

However, it's worth noting that there doesn't seem to be any particularly noteworthy bullish or bearish events stimulating Nvidia's recent volatility. In the eyes of most analysts on Wall Street, Nvidia's recent volatility may be more influenced by technical factors.

On June 18th, Nvidia's market value once reached $3.34 trillion, surpassing Microsoft, and becoming the company with the highest market value in the world. As Nvidia has risen 154% cumulatively since the beginning of this year, it's easy to understand why some investors choose to take profits.

After Nvidia fell for three days, Jochen Stanzl, Chief Market Analyst of the trading platform CMC Markets, said , "What we see in Nvidia is typical volatility. When the stock price rises rapidly like Nvidia, this volatility is predictable."

Steve Sosnick, Chief Strategist of Interactive Broker, said, "It's normal for stocks to take a breath (while rising)… It's abnormal that Nvidia has gone so long and so far without pausing. "

Russ Mould, Investment Director at AJ Bell, also explained Nvidia's accelerated decline on Monday: "There is no denying that Nvidia's plunge of nearly 7% may sound the alarm that the market is changing. It is important to remember that stocks do not always rise in a straight line…When everyone rushes into Nvidia, people will have a 'FOMO feeling', that is, fear of missing opportunity, so they imitate others to buy and further push up the stock price. Conversely, some investors' herd mentality and panic may further exacerbate the sell-off."

Will more people rush in after the decline?

After falling for three consecutive days, most analysts and investors still predict that the company will continue to rise. And perhaps this is also the reason for Nvidia's strong rebound on Tuesday.

Trade Alert data shows that in the three trading days before this Monday, despite Nvidia's three consecutive declines, the number of call options (usually used to bet on the rise of stock prices) is still 1.4 times that of put options. However, this ratio has weakened compared to the previous 10 trading days, when the ratio of call options to put options was 1.6 times.

Tigress Financial market analyst Ivan Feinseth said that as Nvidia's stock price falls, it will rekindle investors' interest in the company and drive stock prices up, "This is a stock that everyone wants to own, and everyone will buy in when it falls."

Meanwhile, Mario Iachini, Senior VP at Vanda Research, who tracks retail investor behavior, also said that retail investors are likely to continue buying the stock during recent declines.

Tom Plumb, CEO of Plumb Funds and portfolio manager, said:"For a successful and highly visible company, this is just a normal correction... I don't think the stock price has reached its historical high before its actual business can prove Nvidia's growth momentum is slowing down. "

Of course, some investors also view Tuesday's gains from a technical perspective. Tom Hayes, chairman of New York's Great Hill Capital, said,"After a 15% drop in three days, today's (Tuesday's) rebound is a normal technical rebound; stock prices don't go down in a straight line every day."

Is it related to Wednesday's shareholder meeting?

It is worth noting that at 9am Pacific Time on Wednesday (12pm Beijing Time on Wednesday night), Nvidia will hold its annual shareholder meeting. Will there be any major news affecting Nvidia's stock price at this meeting?

According to previously disclosed schedules, Nvidia investors will vote on executive compensation, board of directors re-election, and approval of the accounting firm at the shareholder meeting.

For AI technology enthusiasts, this shareholder meeting may not announce any groundbreaking news, but it may also become a stage for Huang Renxun and other executives to convey their confidence in Nvidia and AI prospects to the outside world.

Angelo Zino, an analyst at CFRA, said they "expect no major announcements from the shareholder meeting that will impact the stock price."

He added that Nvidia "may comment on AI/existing products from a high level, but no new news should be expected."

It is worth noting that as part of the annual "compensation vote", investors will vote on the compensation plans of Nvidia executives, including CEO Huang Renxun and CFO Colette Kress. As about 78% of Huang Renxun's compensation comes from stock rewards, Nvidia's rapid stock price rise indirectly increases his compensation.

It is calculated that Huang Renxun's total compensation for the 2024 fiscal year is $ 34.2 million, an increase of nearly 60% from the 2023 fiscal year. Of course, compared with the $ 56 billion compensation package of the "strongest worker in the universe" Musk, which needs to be cashed in for many years, this still pales in comparison.

On June 27th at midnight peking time, nvidia's 2024 shareholder meeting is about to be held, and mooer are welcome to book to watch~

Editor/new