Nivida’s Tuesday plunge largest ever single-day market cap drop in history
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BING-JHEN HONG
Nvidia (NASDAQ:NVDA) stock’s 9.5% fall on Tuesday saw the chip giant lose $279B in value, but it’s not the first time the shares of the company have taken a sizable hit, Deutsche Bank analyst Jim Reid said in a note Wednesday.
According to Reid, if one counts multiple entries per company, Nvidia (NVDA) has booked half of the top 20 drops in market declines in history. Conversely, the company has posted nine of the market’s largest single-day increases, he said.
Nvidia (NVDA) stock has been on a downward trend since the Jensen Huang-led company reported fiscal second quarter results on August 28. The highly anticipated report showed revenue more than doubling Y/Y, suggesting that the artificial intelligence (AI) craze was very much real.
However, for market participants now used to blowout results and guidance, the chip giant’s latest outlook failed to meet up to the loftiest of expectations. Moreover, the company confirmed some production delays to its much-awaited Blackwell line of graphics processing units.
NVDA stock fell 6.4% in reaction to the results on August 29, with that decline wiping off some $197B from the firm’s market cap.
Tuesday’s 9.5% drop came ahead of a Bloomberg report after the market close that the US Department of Justice subpoenaed Nvidia (NVDA) and other companies as part of a probe into whether it violated antitrust laws.
Deutsche Bank’s Reid shared a chart of the top 10 largest daily market cap losses in world markets through history, limiting the list to only one entry per company. See the chart below:
As per Reid, nine of the 10 top drops came past-COVID, which the analyst said was due to the rising size of the Magnificent 7 companies. “Given the jet propelled launch into the stratosphere of the Mag-7 in recent quarters it’s little surprise to see these stocks make up most of both top 10s,” he said.
Reid said before COVID and the growth seen in the Mag-7, it would take a loss of between $50B and $80B to crack the top 10 of single-day drops. “Huge daily moves in reality but relatively small compared to what is required today even if you adjust for inflation,” he added.
Reid also shared a similar chart of the top 10 largest daily market cap gains in world markets through history. Nvidia (NVDA) topped that list as well, with the stock clocking a 12.8% gain on July 31 to add $327B in market cap. See that chart below:
