Nvidia falls deeper into correction territory, Broadcom reverses earlier gains to move lower

NVIDIA Shares fell in premarket trading on Tuesday as Broadcom The stock reversed earlier gains and also fell.

Nvidia shares were down about 1.86% in premarket trading as of 8:26 a.m. ET. On Monday, the company entered correction territory, broadly defined as the point at which a stock falls 10% or more from an all-time closing high.

Nvidia hit its closing high of $148.88 last month.

After an initial surge in trading before the bell, Broadcom shares also dipped and were down about 0.11% as of 8:24 a.m. ET.

Still, in the last five days the two names have followed divergent paths: Broadcom shares rose 40%, while Nvidia shares fell 5%.

Optimism around Broadcom has been fueled by the company’s release last week of fiscal fourth-quarter earnings that exceeded expectations and a revenue outlook for the current quarter that beat forecasts. Several Wall Street brokers, including Goldman Sachs, have recently raised their price targets for Broadcom shares.

Broadcom stock is up more than 120% this year to date, while Nvidia stock is up more than 160% over the same period.

Nvidia’s graphics processing units (GPUs) have proven extremely popular as the silicon of choice for training huge models, such as those developed by OpenAI.

Broadcom’s specialty lies in custom AI chips that the company is developing for hyperscalers, which are large cloud computing companies.

“We see an opportunity in the next three years in AI,” Broadcom CEO Hock Tan told investors during the company’s earnings call last week. “Large targeted hyperscalers have begun their respective journeys to develop their own custom AI accelerators.”