Nvidia’s Decline in Premarket Trading
Nvidia shares fell іn premarket trading оn Tuesday, as Broadcom continued its rapid surge higher.
Nvidia stock was down about 1.8% in premarket trading at 10:47 a.m. London time. On Monday, the company entered correction territory — broadly defined as the point when a stock falls 10% or more from an all-time high close. Nvidia hit its closing high of $148.88 last month.
Broadcom’s Surge
In a tale of two chip stocks, Broadcom shares were 1.9% higher at 10:50 a.m. London time in premarket trade. Over the past five days alone, Broadcom shares have rallied 40%, while those of Nvidia have surrendered 5%.
Factors Behind Broadcom’s Strength
Optimism around Broadcom has been fueled by the company’s release last week оf fourth-quarter earnings that exceeded expectations and a revenue outlook for the current quarter that beat forecasts. A number оf Wall Street brokers, including Goldman Sachs, have raised their price targets оn Broadcom’s stock recently.
Year-to-Date Performance Comparison
Broadcom shares have risen more than 120% this year to date, while Nvidia’s stock has added more than 160% over the same period.
Nvidia and Broadcom’s Focus Areas
Nvidia’s graphics processing units (GPUs) have proven extremely popular as the silicon оf choice for training the huge models, such as those developed by OpenAI. Broadcom’s specialty lies in custom AI chips that the company is developing for hyperscalers, which are large cloud computing companies.
Broadcom’s AI Outlook
“We see an opportunity over the next three years in AI,” Broadcom CEO Hock Tan told investors during the company’s earnings call last week. “Massive specific hyperscalers have begun their respective journeys to develop their own custom AI accelerators.”
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