NVIDIA falls nearly 10% from highs. Normal fluctuation or crash omen?

In recent times, the stock price of global semiconductor giant Nvidia surged to an all-time high, propelling countless investors to soar with the upward momentum. However, the good times did not last long, as Nvidia's stock price began to decline, falling nearly 10% before making a slight recovery on Wednesday, yet it still ended up with an overall decline of 8%.

Nvidia's surge was largely due to the recent hype around AI, with industries ranging from manufacturing, high technology, automotive, and many others considering the use of AI. Nvidia is a key component of the global AI industry, even indispensable.

Over the past year, Nvidia’s performance has skyrocketed thanks to this trend. According to the company's report, its non-GAAP diluted earnings per share grew by 486% in the fourth quarter, driven by the popularity of generative AI models and a huge demand for chips, leading to a significant increase in performance.

However, this trend could not sustain indefinitely. In the past two weeks, Nvidia’s stock experienced a downturn, dropping 10% from its all-time high of $950 per share on March 25, entering a correction phase. The reason for this recent decline has not been officially announced, but it is believed to likely be due to the new artificial intelligence chip released by its competitor, Intel.

According to Intel, this new chip's energy efficiency is more than twice that of Nvidia's most advanced 100 GPUs, and it runs AI models 1.5 times faster than Nvidia's GPUs, completely outperforming Nvidia in performance. Therefore, the decline in Nvidia’s stock price is considered a normal occurrence.