FX168 Financial News (North America) Nvidia fell more than 5% today, and investors seem to be pulling out of large technology stocks that have performed well so far this year. Nvidia, Tesla, Microsoft, Alphabet, Amazon, and Apple all fell today. The “Big 7 Tech Giants”, which had unlimited popularity in the past, have instead become giants that “eat back” US stocks.
(Source: Google)
The Russell 2000 Index is up 3%, which indicates investors may turn to small-cap stocks. The rotation was probably triggered by today's US Bureau of Labor Statistics inflation report.
According to the report, the US Consumer Price Index (CPI) for June, which measures the average price consumers pay for goods and services - was better than expected, with a year-on-year increase of 3%, the lowest level in more than three years.
As the overall inflation data is closer to the 2% target, recent inflation data supports the view that the Federal Reserve will start cutting interest rates this year.
In addition to market rotation, today there was a stock market where senior leaders of large technology stocks cashed out: According to US Securities and Exchange documents, Nvidia director Mark Stevens sold 78,000 Nvidia shares and cashed out 0.104 billion US dollars. Nvidia CEO Wong In-hoon sold 0.24 million Nvidia shares to cash out $31.9 million. In addition, Amazon founder Bezos also cashed out another $0.4527 billion in Amazon shares.
The stock market is overreacting to the news, and a sharp drop in stock prices may provide a good opportunity to buy high-quality stocks. Is now a good time to buy Nvidia?
The market tells us that Nvidia's stock price fluctuates a lot. It has fluctuated more than 5% within 13 times in the past year. In this context, today's trend shows that the market believes the current environment has a significant impact, but it will not fundamentally change its view on this business.
The surge we have previously reported occurred 16 days ago, when the company's stock price rebounded and rose 6.4% after its market capitalization had shrunk by more than $400 billion last week. We noticed that the factors driving the rally were not specific, just as the factors that drove the stock's decline in the previous week or so were not significant. The last significant fundamental data point for the company was May 22, 2024, when Nvidia announced strong earnings for the first quarter of 2024, which exceeded expectations.
Since the beginning of this year, Nvidia's stock price has risen 166%. Currently, the stock price is $128.19 per share, close to the 52-week high of $135.58 in June 2024. Investors who bought $1,000 worth of Nvidia shares 5 years ago are now worth $30,838.
(Source: Google)