MARKET REPORT: £440bn wiped from Nvidia in share price bloodbath

Shares in AI chip designer Nvidia fell again last night, suffering losses since it briefly became the world’s most valuable company to almost £440bn.

In another tough session in New York, the stock fell as much as 6.5 percent to a low of $118.29, after hitting a high of $140.76 on Thursday last week.

Last week’s high gave it a market capitalization of almost $3.5 trillion or £2.7 trillion, overtaking Apple and Microsoft to become the world’s most valuable company.

But its value fell last night to $2.9 trillion or £2.3 trillion, meaning it has lost $550 billion or £436 billion of value in just three trading days.

It has also fallen behind Microsoft in first place and Apple in second.

The sell-off came amid fears that the recent rally in Nvidia shares (which are still up 140 percent this year) is overblown. But Dan Ives, senior equity analyst at Wedbush Securities, described it as “a healthy pullback that we view as short-lived.”

He added: “Nvidia is the only game out there with its AI chips and we view this sale as a gold buying opportunity.”

The decline hit sentiment on Wall Street, with the S&P 500, Dow Jones Industrial Average and Nasdaq struggling in early trading.

In London, the FTSE 100 rose 0.5 per cent, or 43.83 points, to 8,281.55 and the FTSE 250 added 0.6 per cent, or 120.22 points, to 20,562.57.

Hopes are rising that the Bank of England will finally cut interest rates after next week’s general election and the chances of a move at the next rate-setting meeting in August are seen as 50-50.

Investors are planning two cuts by the end of the year (taking rates to 4.75 percent by Christmas) and three in 2025. That would reduce rates from their 16-year high of 5.25 percent to 4 percent.

Shares in construction supplies company SIG have slumped to their lowest level since the depths of the Covid-19 pandemic after it warned that weak demand for construction work is affecting business.

The London-listed company, which sells specialist materials such as insulation, roofing and flooring in Britain and Europe, said it expects annual profits of between £20m and £30m in 2024.

This figure is well below the more than £40m predicted by City analysts. The shares fell more than 20 per cent in early trading before closing down 5.3 per cent, or 1.35 pence, at 25.9 pence, their lowest level since late 2020.

The fortunes of SIG are closely linked to the health of the construction sector. The Sheffield-based company said sales in May and June were around 7 per cent lower than the same period last year. SIG said demand was particularly weak in France and Germany.

Investec analyst Aynsley Lammin cut profit forecasts for this year to £25.5m from £43m and for next year to £45m from £59m.

Shares in Primark owner Associated British Foods rose 2.1 per cent, or 51 pence, to 2,519 pence after HSBC raised the price target to 3,075 pence from 3,010 pence.

But housebuilder Berkeley Group did the opposite – down 2.1 per cent, or 98p, to 4,632p, after Morgan Stanley brokers cut their price target to 4,369p from 4,516p.