Despite the recent downturn, Nvidia remains up nearly 140% this year, making it the second-best performer among S&P 500 Index components. However, the scale of Nvidia's rally, which saw it soar about 240% over 2023, has raised concerns about its valuation. The stock trades at 21 times estimated sales over the next 12 months, making it the most expensive in the S&P 500 by this measure.
Key takeaways:
- Nvidia's stock fell by 6.7%, marking its third consecutive negative session and the biggest one-day percentage drop since April.
- The three-day drop erased about $430 billion from Nvidia’s market capitalization, the biggest three-day value loss for any company in history.
- The drop put Nvidia’s valuation back below the $3 trillion threshold, and under both Microsoft Corp. and Apple Inc. in size.
- Despite the slump, Nvidia remains up nearly 140% this year, making it the second-best performer among S&P 500 Index components.