Nvidia Stock Drops Yet Again, Why Was That?

Earlier this week, Nvidia (NASDAQ:NVDA) presented its investors with a keynote presentation. CEO Jensen Huang shared critical information on their newest initiative, Meta Platforms. Something that would change the tech industry as we know it if proven successful. 

It should have been attractive to investors from the get-go. But the reality was far from that. Instead, the company’s shares saw themselves dropping almost immediately.

Nvidia stock is going through its second day of price declines, which is now dropping an extra 2.2%. It all begs the question. What happened?

All Things Considered, This Initiative Might Be Far Too Expensive

Here’s a brief recollection of what was covered in Nvidia’s presentation.

For those unaware, Nvidia is a company focused on developing artificial intelligence. Additionally, they’re also known for their graphics semiconductors. 

Such is Nvidia’s level of quality that one could argue they’re among the most advanced companies in those markets. Reason for which they decided to work on a metaverse of their own. 

This metaverse would provide customers with virtual assistants. These assistants are so realistic that they would be similar to human ones. This would be executed by employing artificial bot vision and speech recognition onto virtual avatars.

Such is the scope of this project that Huang promised to build a digital copy of the entire Earth at one point. With everything said and done, this is what the Meta Platforms initiative comes to. So what was the problem to begin with?

The answer’s easy: The financial cost would be too high.

This is an initiative with lots of promise. But it would require way too much capital to bring it to life. Reason for which lots of investors thought this could harm their finances. 

In little to no time, tons of them opted to let go of their Nvidia stock, which led to an ongoing price decline. 

Our opinion on the matter? They weren’t necessarily wrong. While Nvidia does have the resources to make it happen, this might not be a worthwhile investment given the required fees, at least while they’re working on it.