On June 25, AI semiconductor company Nvidia finally broke out of a downward trend.
Nvidia surged 5.3% in the afternoon, closing at $124.39, shaking off the correction it entered the previous day.
NVIDIA managed to narrow the drop from its peak of 14% to 8% in a single day thanks to its surge.
NVIDIA had been on a steep rise powered by surprise quarterly results and a 10-for-1 stock split announcement after the market closed on May 22.
From May 23 to June 18, NVIDIA’s stock price skyrocketed by 43%.
However, after the market closed for the Juneteenth national holiday on June 19, NVIDIA stumbled.
NVIDIA’s stock price suddenly plummeted, falling 3.5% on June 20 and 3.6% on June 21. After the weekend, it widened the drop to 6.7% when the market opened on the 24th.
It officially entered a correction phase with a 14% plunge from its peak.
However, the correction phase ended in just a day.
NVIDIA managed to narrow the drop from its peak to 8%, successfully escaping the correction phase.
The market views NVIDIA’s surge as bargain buying.
Even when NVIDIA was repeatedly plummeting, analysts maintained their optimistic outlook. Investment bank, Jefferies, maintained its buy recommendation for NVIDIA on June 23 and raised its target price from $135 to $150.
Many viewed the recent plunge as a necessary adjustment for NVIDIA to make further progress. The dominant opinion was that it was absurd to think the AI theme was over.
According to Barron’s, founder of Navellier & Associates Louis Navellier pointed to bargain buying as a driving force for NVIDIA’s rebound in his analysis note.
As NVIDIA’s stock price has fallen sharply over the past three days, there has been a significant increase in investors looking to accumulate undervalued NVIDIA stocks.
Navellier emphasized that even when NVIDIA was plummeting, the stock price trend of other Magnificent 7 (M7) stocks did not change significantly, particularly noting that the AI trend is still valid.
He explained that the bull market is ongoing. As the prices of the leading M7 stocks paused, investors stepped in to buy at lower prices.
