In This Article:
What Happened?
Shares of leading designer of graphics chips Nvidia (NASDAQ:NVDA) jumped 6.9% in the morning session as markets experienced a boost after data from the Bureau of Labor Statistics revealed that inflation for the month of February 2025 came in better than expected. The CPI (Consumer Price Index - a gauge of the average price consumers pay for goods and services) rose 0.2% from the previous month (vs estimates for a 0.3% increase), while headline inflation rose 2.8% year on year (vs estimates for a 2.9% y/y increase). The data revealed inflation continued to edge closer to the Fed's 2% target, but not quite there yet. The reaction wasn't anything wild, but the sentiment leaned positive. The Nasdaq led the way, climbing 1.4%, boosting some tech stocks.
Separately, Wall Street analysts noted that some of the recently beaten-down Magnificent Seven stocks were now trading at attractive valuations, presenting solid entry points for investors looking to capitalize on their potential rebound.
Also, Reuters reported that TSMC reached out to chipmakers, including Nvidia, AMD, Broadcom, and Qualcomm, about a potential deal for Intel's foundry business.
The shares closed the day at $115.74, up 6.5% from previous close.
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What The Market Is Telling Us
Nvidia’s shares are very volatile and have had 28 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 9 days ago when the stock dropped 7.9% on the news that market volatility continued, with the stock seemingly affected by the broader downturn as the Nasdaq declined 1.3% in another negative session. Tepid economic manufacturing and construction data released sparked another wall of worry about the US economy.
Additionally, investors were likely concerned about the company's business in China, which had been tangled up in the trade war drama. Notably, the Wall Street Journal reported that some Chinese buyers were finding ways around export restrictions to get their hands on Nvidia chips. That kind of news could get regulators thinking about tighter measures, which could further limit Nvidia's business in China.
Nvidia is down 16.4% since the beginning of the year, and at $115.68 per share, it is trading 22.6% below its 52-week high of $149.43 from January 2025. Investors who bought $1,000 worth of Nvidia’s shares 5 years ago would now be looking at an investment worth $21,392.
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