NVIDIA (NVDA)
Nvidia has lost more than $500 billion (£433 billion) in market value since it briefly became the world’s most valuable company last week after shares fell nearly 7 percent on Monday and were in the red in pre-market trading.
Many investors are likely to take profits following the steep rise in the semiconductor manufacturer’s valuation.
David Morrison, senior market analyst at Trade Nation, said: “Given NVIDIA’s meteoric rise, some profit-taking seems entirely reasonable. The stock is up over 180% this year alone. But if it continues to lose ground, there is a risk of contagion that could lead to selling into other big tech companies. If that happens, the market could be in for a deeper and more prolonged decline.
“Yet there is little evidence that investors are even thinking in this direction.”
Another factor weighing on Nvidia is that CEO Jensen Huang sold shares this month as part of a trading plan, which has drawn attention to whether the stock was a bit overvalued.
Read more: FTSE 100 LIVE: European stocks open mixed after Nvidia loses $550 billion
Richard Hunter, head of markets at Interactive Investor, said: “The steep rise in technology and AI stocks in particular is inevitably leading to a point where investors pause and recalculate valuation levels.”
The darling of artificial intelligence recently became the third company ever to reach a market valuation of more than $3 trillion, overtaking Apple (AAPL) and Microsoft (MSFT) to become the highest-valued company in the world.
Its market capitalization has now fallen to $2.91 trillion (£2.29 trillion).
Outflows from U.S. Bitcoin exchange-traded funds (ETFs) reached $1.3 billion in the past two weeks as the cryptocurrency’s price continues to decline.
Bitcoin is holding steady above $61,000 after falling to $59,200 in the early hours of the Asian trading session. The digital asset is now down 11% in June but is still up 42% year-to-date, with gains largely concentrated in ETF approval.
However, according to Farside Investors data cited by Cointelegraph, total outflows from Bitcoin ETFs amounted to $1.298 billion over the past two weeks of trading, with Grayscale seeing the most outflows at $517.3 million over the same period.
Read more: What is a stock split and why do big technology companies choose to do it?
BlackRock’s Bitcoin ETF was the only fund to report positive results, recording $43.1 million in inflows over the past two weeks.
Not only is Bitcoin under pressure due to falling demand for its ETFs, but there is also growing uncertainty about the Federal Reserve’s ability to quickly cut interest rates from a 20-year high.
Crypto analysts give a 14 percent chance that Bitcoin will rise back to $65,000 by the end of the week.
Shares of Trump Media & Technology Group rose in premarket trading ahead of Thursday’s debate between President Biden and former President Donald Trump.
Trump Media stock is up 21 percent and is currently trading at $33.70 per share. The stock closed at just over $27 on Friday.
The share price of the company behind Truth Social has fallen by nearly 50 percent in the roughly three weeks since a New York jury found Trump guilty on 34 counts of falsifying business records.
Read more: How to invest in AI while the rally continues
Trump owns 114,750,000 or about 64.9 percent of the company’s shares. He cannot sell any of his shares until the end of September, when a lock-up period following the merger expires.
Airbus shares fell more than 10% in early morning trading after the aircraft maker cut its full-year profit forecast due to ongoing supply chain disruptions and challenges in its space business.
The manufacturer expects to deliver 770 aircraft this year – up from the 800 originally forecast – while its production target of 75 A320neos per month has been pushed back from 2026 to 2027.
Airbus said it was facing “persistent” and “specific” supply chain issues, particularly affecting engines, aircraft components and cabin equipment.
The company is also investing €900 million in its space systems after identifying “further commercial and technical” challenges.
As a result, the aerospace and defense company now expects adjusted earnings before interest and taxes of 5.5 billion euros this year. It had previously forecast up to 7 billion euros.
“It may not have a major impact on airlines, as they have already indicated that Airbus has reduced planned deliveries. But aircraft manufacturing is proving difficult – just ask Boeing,” said Neil Wilson, chief market analyst at Finalto.
“Demand is not the problem, quite the opposite. But if supply cannot keep up and competition is so limited, that should mean that airlines do not increase capacity too much, which in turn could lead to airfares remaining high for longer.”
Watch: Kenny Polcari to investors: Watch for weakness to deploy more money
Download the Yahoo Finance app, available for Apple And Android.