NVIDIA's Value Soars $329 Billion to New High

This week, AI chip leader NVIDIA (NASDAQ: NVDA) faced a significant market value drop of $193 billion (approximately RMB 1.396 trillion). However, on the 31st, NVIDIA's stock rebounded strongly in the U.S. market, closing with a 12.81% gain and adding $329 billion (approximately RMB 2.379 trillion) to its market value overnight. This surge set a new record high, breaking previous single-day records repeatedly over recent months.

Prior to Bitcoin's 13% price increase, NVIDIA's market value had reached $2.9 trillion. Just a day earlier, the company experienced a 7% decline, erasing over $193 billion in market value. This ongoing volatility has made even Bitcoin, known for its large price swings, appear less stable in comparison.

Bloomberg data shows that in July alone, NVIDIA's stock experienced severe drops, contributing to four of the eight largest market value declines.

This volatility occurs as investors navigate a shift from thriving tech stocks to companies expected to benefit from Federal Reserve interest rate cuts. NVIDIA's stock rose by 150% in the first half of this year. However, better-than-expected inflation data has led to speculation that the Federal Reserve might cut rates as early as September.

Investors have been cashing in on profits from AI investments and shifting their focus to banks and cyclical companies. A week ago, Alphabet Inc.'s AI spending raised concerns about the long-term profitability, accelerating this sector rotation. These concerns eased after Advanced Micro Devices Inc. provided an optimistic forecast for its AI business, prompting a return to the tech sector. Federal Reserve Chairman Jerome Powell's recent statement about a possible rate cut in September further boosted investor enthusiasm for the tech sector and NVIDIA.

Matt Maley, chief market strategist at Miller Tabak + Co., stated, "NVIDIA's volatility reflects the current investor uncertainty. They are worried that the massive capital investment in AI won't yield the anticipated returns."