Nvidia Corp.’s wild ride this week is headed for the record books.
The world’s third-most-valuable company has added a record $329 billion in value — obliterating the single-day record that it has repeatedly set in the past few months.
The 13% rally comes a day after a 7% rout wiped out more than $193 billion from the now $2.9 trillion company, continuing a run of volatility that makes even notoriously turbulent assets like Bitcoin look stolid.
In July alone, the shares have endured routs that account for four of the eight biggest market cap wipe-outs, according to data compiled by Bloomberg.
The volatility comes as investors grapple with a violent rotation out of high-flying technology shares into left-behind companies that would benefit from Federal Reserve rate cuts. The chipmaker rallied 150% in the first six months of the year before better-than-expected inflation stoked bets that the central bank would cut as soon as September.
Investors pocketed profits rung up on artificial intelligence bets and piled into banks and cyclical companies. The rotation accelerated a week ago, when Alphabet Inc.’s AI spending left investors worried profits would be a long time coming. Those worries eased somewhat after Advanced Micro Devices Inc. gave an upbeat forecast on the back of its AI efforts, prompting a fresh rush back into tech. Enthusiasm for the sector, and Nvidia, accelerated Wednesday after Fed Chair Jerome Powell said an interest-rate cut in September was on the table.
“The volatility in Nvidia shows how confused investors are right now,” said Matt Maley, chief market strategist at Miller Tabak + Co. “They’re worried that the huge capital investment into AI will not create the kind of return on investment that people have been hoping for over the past year.”
