On Thursday (November 20) Fr Nvidia (NASDAQ:NVDA) stock price rose 4% before falling 2% by the end of the trading day. This may not sound that significant. But it’s huge. This is a company valued at $4.5 trillion. These are huge inflows and outflows of money.

Thursday’s share price action followed Nvidia’s results released Wednesday evening after the market closed. The earnings report was initially well received, with shares up more than 6% in after-hours trading.

So what happened? And what has changed?

A few theories

No one really knows exactly why the stock price dropped. My distinguished colleague Stephen Wright suggested that the market has become somewhat uncertain about Nvidia’s performance and credentials, and as a result, the CEO has told the market that the OpenAI deal may not go through.

This may be true, but it’s also worth noting that the analyst didn’t cause a single downgrade following the results. More than 20 analysts raised their forecasts or maintained their position. Yes, analysts can be wrong. But many of them point in the same direction. The company’s stock is currently 41% below its average price target.

The next theory that certainly has relevance was the UK labor data. The U.S. added 119,000 jobs in September, more than expected. This concept of a stronger labor market puts less pressure on the Federal Reserve to lower interest rates in December. For a variety of reasons, low interest rates make companies and stocks more vigorous.

And finally there is Bitcoin. Tom Lee, head of research at Fundstrat, suggested that Bitcoin’s decline below 90,000 dollars – in his opinion a technical failure – drained some of the speculative energy from the broader market. When cryptocurrencies stumble, high-bet industry professionals often feel it. This doesn’t tell the whole story, but it’s another burden on sentiment at a time when investors were already looking for excuses to take profits.

When you put it all together, the picture becomes quite uncomplicated: None of these factors speak to Nvidia’s operational strength or long-term prospects. These are macro vibrations, positioning flows and a pinch of market psychology. In other words, noise – not signal.

Metrics

As I write this, Nvidia stock is trading at around 36 times forward earnings and has a price-to-earnings-to-growth (PEG) ratio of one! The former represents a 78% premium over the average in the information technology sector. However, the latter represents a 34% discount compared to the sector average.

What does this tell us? The company’s shares are still highly valued given its growth prospects. This can lead to increased volatility because projected returns are much less quantifiable. Instead, it comes down to whether we believe the predictions and whether we are willing to move beyond the AI ​​bubble accusations.

Personally, I think Nvidia is absolutely worth considering. It is an integral part of the AI ​​revolution and its dominance is clear.