Nvidia’s $30 Billion Market Capitalization Wiped Out by Sharp Decline in Share Price for Three Consecutive Sessions

On June 20, 21, and 24, Nvidia shares experienced sharp declines, losing up to 13% of their value and wiping out $30 billion in market capitalization. This downward trend came shortly after Nvidia became the world’s most valuable company last week, surpassing Microsoft and Apple. The reason for the sell-off is not entirely clear but some analysts suggest it may be due to investors shifting away from hot AI stocks towards other sectors as the year progresses. Despite the recent decline, Nvidia saw a 6.7% increase in its share price in the most recent trading session, hinting at ongoing optimism regarding the company’s central role in the global AI wave.

Ortex Technologies reported that short sellers made nearly $5 billion in profits by selling off Nvidia’s shares for three consecutive sessions following a series of record price increases. During the session on June 24 alone, Nvidia shares dropped by 6.6%, leading short sellers to earn $2.4 billion in profits. This marked the largest profit recorded by Ortex since it began tracking short-selling activity in 2019. When short selling, investors borrow shares to sell at the market price, with the intention of buying them back at a lower price in the future and pocketing the difference as profit. However, if share prices rise instead, short sellers will incur losses which can be unlimited.

Nvidia’s revenue has soared over the past year due to major technology companies like Google, Microsoft, Meta, Amazon and OpenAI investing billions of dollars in its graphics chips