Nvidia Falls to Third in Market Value, Loses $200B

Last Friday (21st), on the occasion of Triple Witching Day, leading AI chip manufacturer Nvidia faced a severe sell-off, resulting in a loss of over $200 billion in just two days. This significant drop has placed its market value behind that of Microsoft and Apple.

Nvidia (NVDA-US), which recently held the title of the world's largest company, saw its stock price decline by more than 3% on Friday to $126.57 per share. Over several days, the stock experienced a drop of over 6%, bringing its market cap to approximately $3.1 trillion, compared to Apple's $3.2 trillion and Microsoft's $3.3 trillion.

Last Friday's Triple Witching Day saw options worth around $5.5 trillion expire, marking the largest event of its kind in history. Market predictions indicated that Nvidia would be particularly affected, with its expiring options being the second-largest among all underlying assets, surpassed only by the S&P 500.

In the U.S. stock market, "Triple Witching Day" refers to the simultaneous expiration of index, stock, and ETF options, occurring four times a year on the third Friday of March, June, September, and December.

Traders believe the weekend sell-off was not driven by any fundamental reasons but highlighted Nvidia's astonishing market performance—nearly a 200% increase over the past year—and its current susceptibility to profit-taking and exhaustion of positive news.

Russ Mold, Investment Director at AJ Bell, commented, "For a company as large as Nvidia, this is just common stock market volatility. Its market value can fluctuate by hundreds of millions or even billions of dollars in an instant."

Despite this, bullish investors continue to support Nvidia. Wall Street analysts believe the AI giant still has room for further growth. On Friday, analysts led by Ben Reitzes from Melius Research raised Nvidia's price target from $125 to $160, marking the fifth increase this year.

Reitzes stated, "We still believe Nvidia is in a better position than some leading SaaS (Software as a Service) companies. In our view, these companies have yet to demonstrate the contribution of AI to their narratives. In contrast, with the opening of AI and vertical optimization of technology stacks, profits are shifting to Nvidia, and Nvidia should capture a larger share of the enterprise application software market."