Nvidia, which had risen to become the number one company in the U.S. stock market capitalization, gave that position back to Microsoft Corporation (MS). This happened as Nvidia’s stock price plummeted by more than 3% on June 20.
On this day, Nvidia’s stock closed at $130.78, a 3.54% drop from the previous day. As a result, Nvidia’s market capitalization, based on the closing price of the day, was $3.217 trillion, less than MS’s market capitalization of $3.3013 trillion.
Nvidia had reached the top spot in market capitalization for the first time ever, recording a record high of $135.58 on June 18, the day before the stock market was closed for Juneteenth.
However, Nvidia’s stock price fell, surrendering the top spot in market capitalization back to MS after just one day. During the day, Nvidia’s stock price hit a record high of $140.76 but eventually closed lower.
The sharp drop in Nvidia’s stock price was not due to a weakening of Nvidia’s growth potential but for other reasons.
It is analyzed that the market volatility increased as the expiration date of index futures and options, and individual stock futures options, known as “quadruple witching day” in the New York Stock Exchange, approached.
Although Nvidia fell from the top spot in market capitalization in just one day, Nvidia’s market capitalization is still larger than the total market capitalization of stock markets in countries like Germany, France, and the U.K.
Deutsche Bank analyzed that the only individual country stock markets larger than Nvidia are the U.S., China, Japan, and India.
Wall Street analysts believe that although semiconductors are traditionally a cyclical industry, considering the potential for long-term investment in Artificial Intelligence (AI), Nvidia is expected to continue to grow in the future.
“Nvidia’s stock price volatility will be short-lived,” predicted Vivek Arya, an analyst at Bank of America (BoA).
Arya set Nvidia’s target stock price at $150. This is about 15% higher than Nvidia’s closing price of $135.38.
