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Nvidia stock set to continue rebound after snapping a 3-day rout

Nvidia stock (NVDA) rose over 2% in premarket trading on Wednesday after the previous day's gain reversed a three-day slide that erased roughly $430 billion of the AI chip giant's market cap.

Shares popped more than 6% on Tuesday to close at $126.09 each after declining nearly 13% in the prior three sessions as investors rotated out of the hottest AI play of the year.

Nvidia hit a record-high close exactly one week ago when it briefly surpassed Microsoft (MSFT) as the most valuable company in the world. The chip heavyweight gave back that title as the three-day sell-off commenced.

"I think it's way overblown. I don't think people should be nervous about what's happening with Nvidia," Kenny Polcari, managing partner at Kace Capital Advisors, told Yahoo Finance on Tuesday.

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"I would use this weakness as an opportunity," he added, noting the timing of the decline.

“We’re at the end of the quarter, so it’s a quarter-marking period. You’ve got a lot of big asset managers that are trying to reshuffle and rebalance," he said.

Polcari added he wouldn't be surprised if the stock slid "another 5% or 8%.”

On Tuesday, Nvidia's market cap climbed back to hover around the $3 trillion level, though it was still below the valuations of Microsoft or Apple (AAPL).

Nvidia has played a pivotal role in buoying the S&P 500 (^GSPC) and the Nasdaq (^IXIC) to repeated record highs in 2024.

The Santa Clara, Calif.-based company completed a 10-for-1 stock split on June 10.

FILE - President and CEO of Nvidia Corporation Jensen Huang delivers a speech during the Computex 2024 exhibition in Taipei, Taiwan, June 2, 2024. A rebound for Nvidia on Tuesday, June 25, 2024, is helping keep U.S. indexes close to their records Tuesday. (AP Photo/Chiang Ying-ying)
Nvidia CEO Jensen Huang delivers a speech during the Computex 2024 exhibition in Taipei, Taiwan, on June 2, 2024. (AP Photo/Chiang Ying-ying) (ASSOCIATED PRESS)

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

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