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

Nvidia shares fell more than 2% Tuesday morning, which Broadcom shares reversed earlier gains to move lower as well.

On Monday, Nvidia entered correction territory — broadly defined as the point at which a stock falls 10% or more from an all-time high close.

Nvidia reached its closing high of $148.88 last month.

After the initial rise in pre-hours trading, Broadcom shares are down more than 4%.

Still, over the past five days, the two names have been on divergent paths, with Broadcom shares up 40%, while Nvidia shares have gained 5%.

Bullishness around Broadcom has been fueled by the company’s release last week of fiscal fourth-quarter earnings that beat expectations and a revenue outlook for the current quarter that beat forecasts. A number of Wall Street brokerages, including Goldman Sachs, recently raised their price targets on Broadcom’s stock.

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

Nvidia’s graphics processing units, or GPUs, have proven extremely popular as the silicon of choice for training the massive artificial intelligence models such as those developed by OpenAI.

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

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