Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

​​NVIDIA's Tuesday slump sets new record – is there more to come?​

NVIDIA set a new record on Tuesday as it suffered the biggest one-day drop in market value in history. What caused it, and what might happen from here?

NVIDIA Source: Adobe images

​​NVIDIA sets a new record, of the wrong kind

NVIDIA and its investors had gotten used to records being broken by the company and its ever-rallying share price.

​But Tuesday’s session, the first of the month for US stock markets, saw the chip company set a new, and less-welcome record, namely the largest one-day fall in a company’s market capitalisation in history.

​NVIDIA stock fell by 9.5%, or $278.9 billion in market value. This builds on the decline seen since it reported earnings last week, and puts it on course to test the August lows.

​Why did the stock fall?

​The stock likely dropped on news that the US Justice Department (DoJ) had decided to investigate NVIDIA, and other unnamed companies.

​Investigators suspect that NVIDIA may be making it more difficult for clients to switch suppliers, while also imposing penalties on those that purchase other chips alongside NVIDIA's products.

​Inevitably, artificial intelligence (AI) is not far from this investigation, since DoJ officials think that NVIDIA's purchase of RunAI for $700 million has made it more difficult to find alternatives for NVIDIA's products.

​NVIDIA caught up in broader market turmoil

​The news broke on a day when global indices were already falling into the red. Given the importance of the sector, and NVIDIA in particular, to further profit growth for US indices, it meant that investors were concerned that this engine of growth would stutter further.

​What’s the outlook from here?

​As everyone is pointing out at present, September and October are not usually great months for US stocks. The average return for both months in election years is usually negative, at 0.46% and 0.34% respectively. Over the last 29 years, NVIDIA's average return in September is -1.95% but a positive 5.74% in October.

​Much now hinges on the non-farm payrolls (NFP) report, which will help inform the outlook for the US economy. Beyond that, NVIDIA's next earnings report is not scheduled until 21 November, though in the short-term a close eye will be kept on monthly semiconductor sales. These were reported to be weak for July, which has put further pressure on NVIDIA's stock price.

​NVIDIA stock price – technical analysis

​Having faltered at $130.00, the stock has now fallen back below the 50-day and 100-day simple moving averages (SMA). The March and April highs around $97.36, which formed the closing lows in early August, are the next obvious level to watch.

​A close below this would open the way to the 200-day SMA, currently $88.61. Buyers will need to see a big rebound back above $111.00 that might help to suggest that a low has formed for the time being.

NVIDIA chart

NVIDIA chart Source: ProRealTime
NVIDIA chart Source: ProRealTime

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.

Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access
Learn more

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Tuesday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.