Nvidia Shares Fall After Record High

Nvidia shares experienced a decline on Wednesday following a record-setting close the previous day. The chip maker saw a drop alongside other technology companies, including its rival, Advanced Micro Devices.

Pre-market Trading

In premarket trading on Wednesday, Nvidia shares were down 2.7% at $610.57. The day before, the stock had closed up 0.5% at $627.74, reaching a new record close.

Profit-Taking Expected

It appears that Nvidia is likely to experience some profit-taking after Advanced Micro Devices disappointed the market with its outlook on sales for AI processors. Despite raising its outlook, AMD's shares were down 6.8% in premarket trading. Fellow chip maker Intel also dropped by 1.3%.

AMD's Revenue Forecast

AMD increased its revenue forecast for this year from its MI300 chip for AI data centers to $3.5 billion, up from $2 billion previously. According to a FactSet consensus, it is expected to generate $11.2 billion in sales from its data center business in 2024. In comparison, Nvidia is predicted to have about $78.4 billion in revenue across all data-center products.

Challenging Competition

Analyst Rick Schafer from Oppenheimer noted that AMD faces an uphill battle in gaining AI market share against Nvidia's leading A100/H100/B100 accelerators and CUDA software ecosystem.

Recent Performance

Over the past month, Nvidia shares have seen a 32% increase, outperforming the S&P 500 (up 4.6%) and Nasdaq Composite (up 6.3%).

Trading Volume

Nvidia's trading volume reached 4.1 million at Tuesday's close, which is close to its 65-day average of 42.6 million.