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Nvidia stock was down on small news on Monday.
Justin Sullivan/Getty Images
Shares of a newly created $1 trillion company
Nvidia
were taking it on the chin on Monday, and investors looking for a reason should turn to
You’re here
.
Nvidia
(ticker: NVDA) the stock was down 3.7% midday at $406.32, while the
S&P500
And
Nasdaq Compound
decreased by 0.2% and 0.8%, respectively.
Shares fell as low as $401 earlier in the day. At $401, Nvidia’s market capitalization drops below $1 trillion, based on just under 2.5 billion shares outstanding. (This calculation excludes any adjustment for stock options.)
Anything above, say, $405 per share keeps the market capitalization north of the near-mythical $1 trillion level, which in America doesn’t
Apple
(AAPL),
Microsoft
(MSFT),
Alphabet
(GOOGL),
Amazon.co.uk
(AMZN),
Metaplatforms
(META), and
You’re here
(TSLA) have reached.
There were no upgrades or downgrades to speak of. Shares of other chipmakers such as
Advanced micro-systems
(AMD) and
Taiwan semiconductor
Manufacturing (TSM) fell 1.7% and 0.8%, respectively.
Intel
(INTC) rose 0.8%. No upgrades or downgrades for these three actions either.
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the title was however downgraded to
Goldman Sachs
by analyst Mark Delaney. He cut his rating to Hold from Buy while raising his price target to $248 from $185 per share. It was the fourth downgrade for Tesla shares in four days.
The drumbeat of downgrades sent Tesla shares down $11.32, or 4.4%, to $245.28. Shares traded at $242.56 earlier in the session.
What does a Tesla downgrade have to do with Nvidia? The answer is that they are both AI stocks.
Since Nvidia announced its first quarter results on May 24, shares have risen about 33%. Tesla stock did better, up about 34% over the same period. The move added a combined $440 billion to the market capitalizations of both companies.
Investors are treating the two as if they were the biggest AI players in the market. It’s easy to see why for Nvidia. Its chips power the computers needed to run the AI. But Tesla is an AI game in its own way. Its driver assistance software is trained by AI and the better Tesla’s AI, the faster cars will truly drive themselves. Anyway, that’s the hope.
The pair won’t always trade together, but for now they appear to be related. The next event that could break it is Tesla’s second-quarter deliveries, scheduled for July 2. Wall Street expects between 440,000 and 445,000 deliveries, down from around 423,000 in the first quarter.
Given the recent surge in Tesla shares, investors are hoping for an explosive number.
Write to Al Root at allen.root@dowjones.com