Nvidia’s stock price surge contributed to a 2% increase on Nasdaq. The rebound in Nvidia shares, favored in the AI sector, occurred just one day after the stock experienced a severe 17% decline, wiping out approximately $593 billion from its market value in the largest one-day loss for any company on Wall Street.
Nvidia’s stock price bounced back on Tuesday following a significant drop in the prior session due to worries regarding China’s DeepSeek. Nvidia stock closed up 8.82% at $128.86 on the Nasdaq.
The surge in Nvidia’s stock price prompted a 2% increase on the Nasdaq. The rebound in Nvidia shares, a favorite in the AI sector, occurred a day after the stock experienced a drastic 17% decline, wiping out roughly $593 billion from its market value, marking the largest single-session loss for any company on Wall Street. This caused Nvidia’s forward price-to-earnings ratio to reach its lowest point since December 2023.
The sell-off in Nvidia shares on Monday was on the back of concerns over Chinese startup DeepSeek’s launch of AI models, which it said were on par or better than industry-leading US rivals at a fraction of the cost.
As Nvidia stock recovered on Tuesday, options traders quickly piled back into bullish Nvidia contracts. The selloff in the previous session jolted investors long used to the stock climbing ever higher, but options traders were already seizing the opportunity to position for a rebound, Reuters reported.
On Tuesday, Nvidia call options outnumbered put options 1.6 – to – 1, nearly in line with the 1-year average, after dipping to a more than two-month low of 1.36 – to – 1 on Monday, the Reuters report said.
As per Mahesh M Ojha, AVP — Research at Hensex Securities, the technical charts indicate that Nvidia’s stock price appears to remain weak.
Ojha said
“So, one should avoid bottom fishing in Nvidia stock and existing shareholders are advised to hold the scrip with a strict stop loss at $105 apiece. Nvidia shares may trade in the range of $105-135. The stock is not expected to break the $135 level on the upside. If it breaches below $105, the stock may see $90 level. Hence, I recommend ‘sell on rise’ strategy for Nvidia shares,”.
Nvidia’s stock price rise corresponded with the broader recovery in the US stock market, fueled by a surge in technology stocks associated with artificial intelligence.
The Dow Jones Industrial Average increased by 136.77 points, or 0.31%, reaching 44,850.35, the S&P 500 climbed by 55.42 points, or 0.92%, to 6,067.70, and the Nasdaq Composite went up by 391.75 points, or 2.03%, to 19,733.59.
The technology sector of the S&P 500 surged 3.6%, marking its largest daily percentage increase since July 31, whereas the semiconductor shares index rose by 1.1%.
