From Coinpedia · By Nidhi Kolhapur
The recent US stock market decline has pushed several stock prices lower. However, some companies have continued to report higher revenue and profits despite the market fall. This has raised interest in stocks that have dropped sharply from their recent highs but continue to show business growth.
Here is why each stock has come under pressure and what investors should watch.
Advertisement 1. Nvidia (NVDA)
Nvidia shares have fallen 26.6% from their October 6 high as investors pulled back from AI stocks following the US midterm elections. Concerns over new data centre rules and reports involving CEO Jensen Huang and a woman suspected of sharing information with China added to the pressure.
However, Nvidia’s business remains strong. Its revenue more than doubled year over year, while profit grew 126%. The company continues to supply AI chips to major technology companies, including Microsoft, Meta, Amazon and Google.
The stock is now trading at its lowest valuation based on past earnings since May 2019. Its November 17 earnings report will be an important event for investors.
2. Applied Digital (APLD)
Applied Digital builds and operates data centres for AI companies. Its shares have dropped around 74% from their May high of $50.72, recently reaching $13.11. The decline comes amid concerns about AI spending, data centre expansion and opposition to new data centre projects in the US.
However, the company has signed leases for approximately 1.4 gigawatts of capacity, while only 250 megawatts are currently operational. This means much of its planned capacity is yet to generate revenue.
Revenue has grown more than fourfold from a year ago. Management expects 300 megawatts of capacity to be operational in North Dakota by the end of 2026.
Investors will be watching whether the company can complete its projects on time and turn signed leases into revenue.
3. Microchip Technology (MCHP)
Microchip Technology makes chips used in cars, home appliances, industrial equipment, defence systems and data centres.
Its shares dropped 22.6% in two days after the company gave a weak outlook for the next quarter. Management said some sales recorded in September were one-time orders and would not repeat.
Despite the decline, the analysis points to a significant improvement in profitability. Daily profit reportedly increased from around $450,000 a year ago to $4.4 million.
Historical data also shows that the stock recovered within a year after eight previous declines of more than 40% from its record highs. However, it often fell further before recovering, so another decline remains possible.
4. Reddit ( RDDT)