Why Is Everyone Talking About Nvidia?

As high inflation has constrained consumer discretionary spending in 2022, several tech companies have seen their share prices drop significantly. The Nasdaq-100 Technology Sector index has decreased 34% so far this year as a result.

Few technology companies' stocks have plunged as drastically as Nvidia's (NASDAQ: NVDA). The graphics processing unit (GPU) leader's shares are down 55% since January.

Nvidia has faced dwindling PC sales, changes in the cryptocurrency sector, and a U.S. ban on exporting some of its most powerful chips to China. Despite Nvidia's problems, several experts promote the stock as a bargain.

The epidemic encouraged people to spend in home office technology and gaming PC upgrades in November 2021. In 2022, tech demand fell sharply across the industry.

As mining of the second-largest cryptocurrency ended, some $1,000 graphics cards lost half their value overnight.

Many who possessed dozens of GPUs for Ethereum mining are selling them. Nvidia's 95% GPU market share means a big drop in demand.

Nvidia debuted its newest GPUs on Sept. 20, but consumer feedback was poor due to price rises. The new RTX 4090 GPU sells for $1,599, 7% more than the previous generation, and the RTX 4080 sold for $899, a 29% price rise from its predecessor.

Nvidia's GPU market share domination provides it a big advantage in 2022. Even if sales for its new 4000 series GPUs are poor, it will continue to offer its 3000 series, which is now cheaper.

If a competitor like AMD (NASDAQ: AMD), which has GPUs coming, tries to undercut Nvidia, it may lower its 4000 series to stay competitive. The company's market control gives it options.

Nvidia's stock has experienced all-time highs and lows in recent years. Changes in crypto mining, U.S. regulation, and a new range of GPUs have lowered its stock price. Cathie Wood's Ark Invest ETFs bought more than 400,000 Nvidia shares this month.

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