Nvidia falls deeper into correction territory, Broadcom reverses earlier gains and trends lower

Nvidia Shares fell more than 2% on Tuesday morning, as Broadcom Stocks reversed earlier gains and also fell.

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

Nvidia hit its closing high of $148.88 last month.

After an initial surge in premarket trading, Broadcom shares have fallen more than 4%.

Still, the two names have diverged over the past five days, with shares of Broadcom up 40% while shares of Nvidia fell 5%.

The optimism surrounding Broadcom was fueled by the company last week reporting fiscal fourth-quarter earnings that beat expectations and a current-quarter revenue outlook that beat forecasts. A number of Wall Street brokers, including Goldman Sachs, recently raised their price targets on Broadcom stock.

Shares of Broadcom are up more than 120% so far this year, while shares of Nvidia are up more than 160% in the same period.

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

Broadcom’s specialty is customized AI chips that the company develops for hyperscalers, i.e. large cloud computing companies.

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