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Nvidia (NVDA) stock down 10% from highs, in correction territory

Nvidia founder and CEO Jensen Huang displays products onstage during the annual Nvidia GTC Conference at the SAP Center in San Jose, California, on March 18, 2024.

Josh Edelson | Afp | Getty Images

Chipmaking giant Nvidia has entered “correction territory,” with its shares now down 10% from its most recent all-time high.

The company, which makes graphics processing units — or GPUs — has been a key beneficiary of the artificial intelligence boom, which boosted demand for its chips.

Nvidia GPUs are commonly used for compute-intensive AI applications, such as OpenAI’s ChatGPT AI chatbot. Its server chips are also a key component of data centers.

The company’s financial performance has been on a tear in the past year. It reported a 486% jump in non-GAAP earnings per diluted share in the December quarter, citing huge chip demand, thanks to the popularity of generative AI models.

The stock has come under pressure for the past two weeks, however. The shares are off 10% from their last all-time closing high of $950 apiece, which they hit on March 25. The stock closed at a price of $853.54 on Tuesday, down 2% for the session.

Nvidia’s shares are down less than 1% in U.S. premarket trading Wednesday.

Definitions on what constitutes a market correction vary, but it is generally considered to be a sustained drop of 10% or more from all-time highs.

What’s the reason for the decline?

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