Nvidia Corp posted its biggest one-day drop in nine months as traders took profits following a rally that saw the stock gain more than 19% in six consecutive trading days.

The chipmaker’s shares fell 5.6% on Friday, the biggest drop since May 31. In a sign of how far Nvidia has rallied this year, the drop erased about US$130 billion in market value, ranking among the biggest single-day value destructions in US stock market history.

Nvidia shares have soared this year amid rising optimism that demand for its chips used in artificial intelligence computing will remain robust. Even after Friday’s decline, the stock is up more than 70% in 2024. With a market value of about US$2.2 trillion, Nvidia is the third biggest company in the S&P 500 after Microsoft Corp and Apple Inc.

Earlier in the session, Nvidia shares gained as much as 5.1%, pushing a momentum indicator to the highest since November 2021, signalling the stock was ripe for a pullback. The relative-strength index climbed above 85 on Friday, the highest since November 2021, before dropping to around 70.

  - Bloomberg