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Why NVIDIA's Stock Is Plunging Today

By Chris Neiger – Sep 4, 2020 at 12:03PM

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Some investors are selling their stock and taking the gains made earlier this year.

What happened

Shares of NVIDIA Corporation (NVDA -2.52%) are falling today as investors continue to sell off some of their stock following the market's rapid rise over the past few months.

NVIDIA's stock was down by as much as 10.1% during this morning's trading. As of 11:37 a.m. EDT, the company's stock had fallen 7.1%. 

So what

The broader stock market began falling yesterday as investors reversed course and sold off shares. Up until yesterday, the S&P 500 had gained 9% since the beginning of this year, mainly led by investors buying up tech stocks. But investors are now taking some the gains they've made this year and are selling their shares. As a result, the S&P 500 fell 3.5% yesterday.

A green and red line graph on a dark background.

Image source: Getty Images.

NVIDIA shareholders appear to be following the same pattern as the broader market and the company's stock tumbled 10% yesterday before falling again this morning. Technology companies are taking the brunt of the market's sell-off, as they've been the stocks that have made some of the biggest gains this year.

Before the stock market began falling two days ago, NVIDIA's share price was up 144% this year.

Now what 

Nothing has fundamentally changed with NVIDIA's business, nor is there any company-related news that would cause investors to sell the tech stock today. Instead, the market is simply pulling back from the run-up it's made since stocks plunged in March. As the U.S. continues to work through the coronavirus pandemic and the subsequent recession, investors can likely expect more market uncertainty in the coming months.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends NVIDIA. The Motley Fool has a disclosure policy.

Stocks Mentioned

Nvidia Stock Quote
$167.04 (-2.52%) $-4.31

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