- Nvidia's stock fell nearly 10% after reaching a $5 trillion market cap milestone
- Tech stocks like Oracle, Meta, Palantir, Tesla, AMD, and Broadcom also saw declines
- Nasdaq dropped 5.2%, S&P 500 fell 3.2%, and Dow slipped 2.2% since Nvidia's milestone
It hasn't been too long since Nvidia became the first company with a market capitalisation of over $5 trillion. The company reached the milestone on Oct. 29, and since then, things have not gone too well for Wall Street's AI-driven stocks.
Since Nvidia's record milestone, the chipmaker's stocks have fallen almost 10%, thus wiping a significant portion of its year-to-date gains. But the weakness is not just limited to Nvidia and has been witnessed across the broader tech sector.
Oracle is down 20% since Nvidia's milestone, while Meta has fallen almost 20% as well. Palantir has corrected almost 14% while Elon Musk's Tesla shares are down 11.4%.
Meanwhile, Nvidia's closest competitor, AMD, shares have almost 10% as well. The weakness has been visible in peer Broadcom as well, with the stock correcting more than 10%.
These declines have rippled through the US stock market as a whole, with the Nasdaq index falling 5.2% since Nvidia's $5 trillion milestone. S&P 500 is also down 3.2% while the Dow has slippped 2.2%.
This sharp correction comes in the midst of a series of high-profile moves that have signalled caution surrounding the tech-driven rally in the US market.
Michael Burry, known for his "Big Short" during the 2008 financial crisis, has taken positions against Nvidia and Palantir, though Burry has since de-registered his asset management firm.
Softbank, meanwhile, sold $5.8 billion worth of Nvidia shares, trimming exposure after the stock's brilliant rally. Tech investor Peter Thiel has also exited his position in Nvidia.
All these moves could point to two things at the same time. While profit-taking is certainly one aspect, there appears to be a broader concern surrounding the AI rally, with many believing it has peaked already.
With the market entering tighter phase of liquidity, it will be interesting to see if these AI-driven stocks can bounce back in the coming months.
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