On Tuesday, NVIDIA (NVDA, Financial) experienced significant market volatility. After opening higher, its stock price quickly dipped by 1.6% before recovering to gain over 1%, trading at $120.20. This fluctuation follows a warning from Nassim Taleb, author of "The Black Swan," who suggested that Monday's sharp decline in NVIDIA's stock is just the beginning for investors rushing into AI-driven stocks.
Taleb, speaking at a hedge fund event in Miami, cautioned that future corrections could be double or triple the 17% drop NVIDIA experienced earlier in the week. Monday's downturn erased $589 billion from NVIDIA's market capitalization, marking the largest loss in its history. Taleb emphasized that this is the start of a reality check for investors, as they begin to realize the imperfections in their investment strategies.
He noted that investors have been overly focused on the narrative that NVIDIA's dominance in the AI sector will lead to continuous stock price growth. However, considering the risks within the industry, Taleb argued that Monday's decline was actually "very small."
