Why NVIDIA shares fell sharply on Tuesday

What happened

Graphics chip maker actions NVIDIA (NASDAQ: NVDA) traded up to 7.4% lower on Tuesday. At around 3:25 p.m. EST, the stock was down 5.8%.

This decline came as many tech stocks fell sharply. Growth stocks like NVIDIA are particularly hard hit, extending a sell-off that began on Monday following the news of good interim results from a phase 3 COVID-19 vaccine trial. Broadly speaking, industry stocks technology have benefited from the living-at-home environment necessitated by the pandemic.

Image source: Getty Images.

So what

NVIDIA is still up about 64% over the past six months, even including Tuesday’s liquidation. So it’s no surprise that stocks take a break as many other tech stocks pull back.

Reflecting this downtrend in tech stocks, Nasdaq composite was down 1.2% at the time of writing on Tuesday.

Interestingly, NVIDIA’s stock decline followed the arrival of positive news: Hyundai engine has selected the NVIDIA DRIVE platform for future infotainment systems for Hyundai, Kia and Genesis models.

Now what

Amid all this volatility, investors should stay focused on NVIDIA’s underlying business.

The company’s revenue grew 50% year-over-year in its most recent quarter. Additionally, CEO Jensen Huang seemed confident about the company’s dynamics at the time. “Despite the impact of the pandemic on our professional visualization and automotive platforms, we are well positioned to grow, as games, AI, cloud computing and autonomous machines drive the next industrial revolution around the world. “He said in the publication of the second quarter results. in August.