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20.10.2023 15:22, Alexey Razin
In June of this year, NVIDIA’s capitalization crossed the important mark of $1 trillion, and so far the company has managed to stay above it, but the events of recent months are trying to break the optimism of investors who are betting on the rapid development of artificial intelligence systems. The company has lost $180 billion of its capitalization since late August, and this week it suffered its worst two-day share price decline in more than a year.
Image Source: NVIDIA
As explained Bloomberg, this week NVIDIA shares lost 8.5% in price in just a couple of trading sessions, and the trigger for this dynamic was the introduction by the US authorities of new restrictions on the export to a number of countries of not only computing accelerators, but also flagship gaming graphics solutions. In Chinese retail prices for the GeForce RTX 4090 have already doubled and a shortage immediately arose, since from now on there will be problems with the supply of video cards of this model to China.
All the mantras about the absence of a serious threat to short-term revenue dynamics due to new US sanctions, heard from the lips of NVIDIA management, do not find proper understanding among investors. As Bloomberg explains, many analysts are aware that NVIDIA’s financial performance will worsen in the short term due to US sanctions, but most are still optimistic about good revenue dynamics in the long term. At the same time, the company’s shares continue to lose value this week.
In mid-September, NVIDIA shares even tried to rise in price over 15 trading sessions, and they managed to rise in price by 14% during this period, but overall this did not allow them to avoid losses, and September became the worst month for the company’s shares since the beginning of this year. Overall, however, NVIDIA shares have increased by 194% since the beginning of January, which, given the current difficult macroeconomic conditions, stands out strongly from the general range of stock indices. If the company’s securities continue to fall in price until the end of the week, it will be the worst price for them since August.
2023-10-20 12:22:00
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