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Nvidia NVDA-3.10% stock is quickly recovering lost ground as investors take advantage of lower share prices.
In the last four trading days, the chip giant’s stock has climbed nearly 19%, recovering more than $400 billion in market value from the roughly $900 billion that was wiped out by a retreat from the stock, hastened by last week’s market rout.
Nvidia’s shares traded at $116.14 apiece at market close Tuesday, roughly back to its July 31 price level. Its shares were up another 1.55% in pre-market trading Wednesday. To be sure, shares of the company are up 141% in 2024 so far.
The chipmaker’s stock rallied at the start of the year, thanks to red-hot demand for its chips used in training generative artificial intelligence models. The chipmaker’s stock closed at a record high $135.58 on June 18 after it initiated a 10-for-1 stock split earlier that month.
In July, global chip stocks, including Nvidia, fell in response to a Bloomberg report that the Biden administration was considering using its toughest export control, the foreign direct product rule, to prevent sales of advanced chipmaking equipment to China. The decline was also spurred by comments about Taiwan made by Former President and Republican nominee Donald Trump. Wall Street said that that massive chip selloff, however, was an overreaction.
Since that record high, Nvidia has dropped more than 14%. But rather than being cause for panic or signs of a bubble, analysts see this as an opportunity for savvy investors.
Goldman Sachs GS+1.42%’ technical strategist Scott Rubner advised investors to “buy the dip,” noting that the stock market could be set for a turnaround at the end of August, with markets hitting new highs after the U.S. presidential election in November.
Bank of America BAC-0.19%’s Vivek Arya similarly named Nvidia a top “rebound” stock in a note to investors Monday. While noting that Nvidia’s volatility could persist through September, he said a rebound is likely in the fourth quarter as “seasonal headwinds dissipate.”
—Britney Nguyen and Laura Bratton contributed to this article.