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Shares in artificial intelligence chip designer Nvidia rose almost 6 per cent after a three-day slump that saw $557bn (£440bn) wiped off their value.
In a day of much-needed relief for investors holding Nvidia shares or funds that own the company, the stock hit almost $125, pushing it back towards a market capitalization of $3bn (£2.4bn).
The mini rally came after the US chip giant lost 16 per cent of its value in just three days in what has been described as “the biggest bloodbath in investor history”.
Rebound: In a day of relief for investors with Nvidia stock or funds that own the company, the stock hit $123, pushing it back toward a $3 trillion market cap.
The crash ended Nvidia’s brief reign as the world’s most valuable company, and after briefly overtaking Microsoft and Apple, it now sits in third place behind them.
But analysts said the recent surge in Nvidia’s share price (which is still up more than eightfold since the start of last year) meant a correction was inevitable and urged investors to remain calm.
Neil Roarty, an analyst at investment platform Stocklytics, said: “A week ago, Nvidia was celebrating becoming the most valuable company in the world. Now it is licking its wounds.
Even in this context, there may still be reasons for optimism. The fundamentals behind Nvidia’s growth remain the same.
If the AI technology powered by its chips is believed to completely recalibrate the global economy (and many do), then a $3 trillion market cap suddenly seems considerably more reasonable.
The FTSE 100 index fell 0.4 per cent, or 33.76 points, to 8,247.79 and the FTSE 250 fell 1 per cent, or 199.14 points, to 20,363.43.
Ocado suffered another dismal session after analysts downgraded the stock’s outlook.
Morgan Stanley cut its price target to 215p from 345p, while Goldman Sachs cut it to 400p from 680p.
The verdicts came days after Ocado’s Canadian partner Sobeys delayed plans to open a fourth robotic warehouse.
The shares fell another 7.1 per cent, or 22.1 pence, to 290.4 pence and have lost more than 60 per cent of their value this year.
Insurer Admiral Group went the other way after analysts at Berenberg raised their price target to 3,127p from 2,973p and advised clients to buy the shares.
Admiral shares gained 2.3 per cent, or 58 pence, to 2,627 pence. An activist investor has increased pressure on Elementis to fire its chief executive and warned that he will attack the chairman if he does not act.
Gatemore Capital Management has reiterated its call for the dismissal of Paul Waterman from his job at the chemicals group, which makes ingredients used in deodorants and skin creams.
In an open letter to the board, Gatemore managing partner Liad Meidar said there was a “critical need for urgent changes” and warned that if Waterman is not fired, he could try to unite shareholders in a bid to oust the board. President John O’Higgins.
Elementis shares fell 1.1 per cent, or 1.6p, to 147p.
AstraZeneca said its blockbuster drug Imfinzi failed as a follow-up therapy in a late-stage trial in patients with a type of early-stage lung cancer.
The shares rose 0.6 percent, or 72 pence, to 12,550 pence.
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