Nvidia’s stock fell 10% without any direct news, as it got caught in a broader AI stock sell-off. Another AI stock leader, Super Micro Computer, failed to report preliminary revenue, leading to doubts about its upcoming results. This caused Nvidia to drop, along with Supermicro.
AI stocks had seen significant gains throughout the year, driven by strong growth and excitement for the technology. Nvidia’s stock had nearly doubled year to date, reaching a market cap of $2 trillion. However, much of these gains were fueled by sentiment and FOMO, which can quickly lead to a sell-off when negative news arises.
The sell-off triggered by the lack of a revenue report from Supermicro could be an overreaction, as it might not necessarily mean weaker quarterly results. Nvidia, as a partner of Supermicro, may not be significantly impacted by Supermicro’s performance. However, both stocks are influenced by sentiment in the AI sector and high expectations for the technology.
It remains to be seen if the sell-off is significant or just a temporary dip. Investors should watch out for Supermicro’s Q3 earnings report to confirm or reverse the impact of today’s sell-off. Nvidia’s stock is likely to move in line with Super Micro Computer once this information is released.
Before investing in Nvidia, investors should consider other potential opportunities. The Motley Fool Stock Advisor team has identified 10 stocks with strong growth potential, and Nvidia is not among them. The service provides guidance on building a portfolio and new stock picks every month, with significant returns since 2002. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company.
Overall, Nvidia’s stock plunge appears to be part of a broader AI sell-off driven by speculation and sentiment in the market. Investors should stay informed about developments in the sector and consider other investment opportunities before making decisions about Nvidia stock.
