We’ve seen this movie. From Wolf Richter at wolfstreet.com:
Because these price spikes are a state of mind. And when that state of mind changes – see Tesla.
Nvidia is special because the dollars are suddenly so huge – a hair over $2 trillion at the open on Friday, and just a little below $2 trillion at the close. Over the past 12 months, market cap has spiked by $1.46 trillion, including the biggest-ever-for-any-stock one-day spike of $277 billion on Thursday, on exceeding revenue expectations by $2 billion.
There are other charts that look even wilder because these are crazy times, and all kinds of stuff has been spiking and in crazy ways. And Tesla’s chart used to look like this too, before the shares plunged 70% in 2022. Crazy spikes like this generally don’t lead to a permanently high plateau. But Nvidia is now huge, and it’s floating on top of a mindboggling AI-mania.
Nvidia has always been a volatile stock because something always derails the latest GPU-to-the-moon narrative. For example, between November 2021 and October 2022, Nvidia shares plunged by 65%, barely dodging our Imploded Stocks pantheon (minimum requirement: -70% from high). And now the numbers are much bigger. We show the market cap in the chart because the dollars are now so huge that they really matter for the overall market:
