Stocks of NVIDIA Enter a Correction. Here’s Where the Other Magnificent Seven Stocks Stand.

In Tuesday's trading session, the stocks of leading chip companies are experiencing declines, potentially pushing Nvidia Corp. shares into correction territory.

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Nvidia's stock (NVDA) is down by 3.3% in morning trading on Tuesday, hovering around $843. A close below $855.02 would categorize the stock as being in correction territory, typically defined on Wall Street as a decline ranging between 10% and 20% from a bull-market peak.

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If this trend continues, Nvidia will join Apple Inc. in correction territory. Apple's stock (AAPL) entered this phase on March 4 when it closed below $178.30.

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Among the other major tech stocks, collectively known as the "Magnificent Seven," Tesla Inc.'s stock (TSLA) is already in a bear market, marked by a decline of over 20% from its bull-market peak. However, the remaining four components—Alphabet Inc. (GOOG and GOOGL), Amazon.com Inc. (AMZN), Meta Platforms Inc. (META), and Microsoft Corp. (MSFT)—are either maintaining their stock prices near highs or experiencing upward momentum. For example, Alphabet shares are up by 0.4% in morning trading and are on track to close at a new all-time high of $155.45.

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Although the PHLX Semiconductor Index (SOX) is experiencing only marginal declines in Tuesday's session, some trendy chip-related companies are facing more significant drops alongside Nvidia. Super Micro Computer Inc. (SMCI) shares are down by 4.7%, and ARM Holdings PLC (ARM) shares have decreased by 2.5%.

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Intel Corp.'s stock (INTC) is also down by 1.1% and is heading towards its sixth consecutive daily decline.

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Providing a cautious long-term perspective on Nvidia shares, D.A. Davidson analyst Gil Luria expressed concerns on Tuesday. While acknowledging the potential for Nvidia to deliver exceptional performance in 2024 and possibly beyond, Luria highlighted trends indicating a significant cyclical downturn by 2026. Factors such as shrinking models, steadier growth in demand, maturation of hyperscaler investments, and increased reliance by Nvidia's largest customers on their own chips are seen as unfavorable for the company's future prospects. Luria maintains a neutral rating on Nvidia's shares.

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