Nvidia’s shares fell in premarket trading on Tuesday, as did Broadcom’s shares, which erased earlier gains and also dropped.
Nvidia shares dropped around 1.86% in premarket trading at 8:26 AM ET. On Monday, the company entered correction territory, which is broadly defined as the point when a stock drops 10% or more from its historical closing high.
Last month, Nvidia shares reached a high of $148.88.
After an initial gain in premarket trading, Broadcom’s shares also declined and were about 0.11% lower at 8:24 AM ET.
However, over the past five days, these companies have moved in different directions: Broadcom shares have increased by 40%, while Nvidia’s shares have dropped by 5%.
Optimism around Broadcom was bolstered by the company’s fourth-quarter results, which exceeded expectations, along with its earnings forecast for the current quarter, which also came in above projections. A number of Wall Street brokers, including Goldman Sachs, have recently raised their target prices for Broadcom shares.
Broadcom’s shares have risen more than 120% this year, while Nvidia shares have added over 160% in the same period.
Nvidia’s graphics processors (GPUs) have proven immensely popular for training large models like those developed by OpenAI.
Broadcom specializes in custom AI chips that the company develops for hyperscalers — large companies engaged in cloud computing.
“We see opportunities over the next three years in AI,” said Broadcom CEO Hock Tan during an investor call last week. “Big specialized hyperscalers are beginning to develop their own custom AI accelerators.”