Nvidia Value Takes $900 Billion Hit Even As AI Spending Ramps Up

Tech giant Nvidia has declined more than $900 billion in value since June 2024, and here it shows just how bad it has been. One must be thinking that the recent growth that has been consistently driving Nvidia’s revenue, mainly the AI market, is slowing down. However, for that to happen, it must become the reference model for the value-added services sector, something it has not yet been despite having developed some key partnerships as of now.

Many of the major tech stocks trading on the New York Stock Exchange were closed in red on July 24 because of a huge selloff. Leading technology firms like Nvidia, the largest provider of AI chips, lost nearly 7 percent, after that Broadcom, which fell around 7 percent and Super Micro Computer, which decreased by over 9 percent in the past week.

Also, the technology giants Apple, Microsoft, Meta, and Alphabet also saw their stock prices drop. These companies have been very active in supporting AI and have invested a lot of money in AI tools and facilities. Another segment that took advantage of the AI was investors, who invested about $9 trillion over the last year. However, now the investors are leaving as they are suspicious about the actual use of current AI applications increase.

Also Read: Forget Nvidia: Billionaires Are Dumping It and Piling Into These 3 Surprising Value Stocks Instead

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What are the predictions now?

The decrease in the value of Nvidia is not because AI is no longer effective; it could be due to the change in market factors. They have been shifting funds from one investment to the other, mainly from the expensive technology firms to those of the utilities and the real estate. Moreover, concerns about a lagging economy have made consumers more hesitant, and this is putting more pressure on Nvidia stock.

Another problem is that although companies are investing billions of dollars in AI, the rate of return is not unknown, and it is probably not very high. The public wants to know when they will start getting actual profits from all this AI investment.

That is why the company’s value will largely depend on a prediction for the next financial year, which will be presented in July, and Nvidia’s next earnings report in early August and the end of August, respectively. These reports will give a much better picture of where things are at the moment, but until then, the stock may further decline as investors wait for the signs that AI expenditures will indicate growth for Nvidia.

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People May Ask

Why has Nvidia’s value dropped by $900 billion?

The drop in Nvidia stocks is mainly due to market trends and changes rather than a failure in AI technology. Now, investors are taking their funds from high-priced tech stocks like Nvidia and investing in sectors like real estate and utilities.

Another major reason for the drop in value is the slow economy; it means economic concerns have equally contributed to the huge selloff.

Is the AI market slowing down?

No, it is not clearly known if the AI market is slowing down because major companies like Nvidia’s partners, Microsoft, Google, and Meta, are still heavily investing in AI. But the fact is that it is still not known where the profit will start coming from these investments.

Why are investors concerned about AI investments?

The investors are concerned because there is no prediction of the profit, and it is still unclear. In the long term, profitability and viability, there is a lack of tangible and immediate profits from AI spending.

How are other tech companies affected?

Apart from Nvidia, other major companies like Apple, Microsoft, and Alphabet have also seen a drop in their stocks recently. This decline is nothing but a part of the broader market selloff, which is affecting the tech sector.

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Nvidia Value Takes $900 Billion Hit Even as AI Spending Ramps Up