The Fallout from Friday’s Plunge
Nvidia Corp. (NVDA) witnessed a sharp 5.55% decline in its shares on Friday, breaking its six-day winning streak. Portfolio manager Jeff Kilburg raised a red flag, foreseeing a potential downturn come Monday.
Market Slump and Technical Analysis
Kilburg highlighted Nvidia’s staggering $225 billion market cap loss from its intraday high on Friday, with further loss in after-hours trades. He pointed out a technical gap down to $625, reflecting a significant dip from where the stock stood previously.
A Reality Check: The Fever Breaks
Assessing the stock’s recent performance, Kilburg mentioned that it felt like the fever had broken. He reminisced about Nvidia’s monumental market cap surge, going from $350 billion just over a year ago to a staggering $2.2 trillion.
He marveled at the stock’s journey, recalling the disbelief when it hit $550 to $600, only to soar to $974 recently.
Contrarian Moves and Sensible Calls
Kilburg revealed that his firm made strategic put purchases, a move that paid off well amidst the stock’s unexpected decline. This move may have appeared counterintuitive given Nvidia’s previous relentless upward trajectory.
The AI Optimism Amidst Market Jitters
While Kilburg expressed caution, many tech analysts remain optimistic about Nvidia’s foundational strength in the field of artificial intelligence. Industry experts foresee the AI trend enduring for another few years before any potential bust.
With Wedbush’s Dan Ives highlighting Nvidia’s pivotal role in the AI accelerator market, the company is positioned to reap substantial benefits from the ongoing AI revolution.