Nasdaq sets record as Nvidia slides, with investors shifting focus to other semiconductor leaders
Nvidia shares fell on Monday, placing the AI chip leader in correction territory, even as the Nasdaq Composite reached a record high, according to CNBC.
The stock’s decline highlights its recent struggles, despite surging 166 percent this year on strong artificial intelligence demand.
Nvidia shares dropped 1.7 percent Monday, bringing the stock 11 percent below its closing high of US$148.88, recorded last month. This places it firmly in correction territory, typically defined as a decline of 10 percent or more from a recent peak.
Nvidia’s stock has fallen 4.5 percent in December, reflecting a period of underperformance.
Keith Lerner, co-chief investment officer at Truist, noted that while Nvidia remains vital for AI infrastructure, the market may be rotating to other opportunities.
“You need Nvidia, and you need their chips for infrastructure,” Lerner said.
“But I think what the market’s also saying is that there are other beneficiaries beyond that. There’s a rotation within the Magnificent Seven, which we’ve seen a couple times this year already.”
Lerner’s remarks reflect a broader trend, as Wall Street appears to be taking profits from Nvidia’s rally this year. The company’s graphics processing units, which power large language models, have seen soaring demand since the launch of ChatGPT in late 2022.
Roth MKM analysts noted that the US$125 to US$130 range will be a critical test for Nvidia’s stock and potentially for the broader market. While Nvidia struggled, other semiconductor stocks showed significant strength.
Broadcom surged 11 percent Monday, building on a 24 percent rally from Friday following its strong earnings report. The performance pushed Broadcom’s market value above US$1tn.
“Broadcom’s comments last week probably drove momentum investors to start looking there for even faster growth,” said Kim Forrest, chief investment officer at Bokeh Capital Partners.
“Momentum has been driving this stock. I don’t think momentum is going to kill it quite yet, but momentum does what momentum does, which is it seeks the higher flyer.”
Other semiconductor stocks also rose:
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Micron Technology gained 6 percent ahead of its quarterly results later this week.
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Marvell Technology and Lam Research increased by 3 percent and 2 percent, respectively.
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On Semiconductor and Taiwan Semiconductor climbed 1 percent each.
While Nvidia’s decline signals a potential shift, the Nasdaq Composite reached a record high Monday, powered by strength in other sectors.
The performance suggests investors remain optimistic about tech stocks despite Nvidia’s recent underperformance.
For now, Nvidia’s struggles contrast with the broader market’s upward momentum, with analysts watching closely to see whether the correction signals deeper concerns or a short-term rotation within the sector.
