Nvidia's Stock Slump: What It Means for Tech ETFs

Nvidia (NVDA) exceeded expectations with a 122% increase in revenues compared to the same period last year. Despite this impressive performance, Nvidia's share price dropped by 6% in after-hours trading on Wednesday following the announcement of the results. The stock lost more than 9% of its value over the week by Thursday evening. This amounts to nearly $300 billion in market capitalization wiped out in just a few days. That said, the stock remains about 140% up so far in 2024, making it one of the big winners in the US market. This week's profit-taking may partly be explained by the fact that the next-generation Blackwell chip is encountering some production issues. Nvidia's underperformance has weighed down the S&P 500 IT sector index, which fell by 2.51% over the week ending August 29, while the benchmark S&P 500 index slipped only 0.75%. Globally, tech ETFs have been impacted, losing a total of 2.52% over the first four days of the week despite net inflows of over $4.1 billion, illustrating the appeal of tech stocks remains strong.

Here's a comparison between Semiconductors ETFs.

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Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.