Nvidia (NVDA) stock fell more than 6% to close at $118.11 per share on Monday as investors rotated out of the hottest AI play of the year. The session marked the third consecutive day of losses for shares of the chip heavyweight.

The stock has declined more than 12% from its all-time closing high of $135.58 last Tuesday when Nvidia's market cap temporarily dethroned Microsoft (MSFT) as the most valuable company.

The chipmaker has since given back the crown with its market capitalization at around $2.9 trillion, below Microsoft's and Apple's (AAPL) valuations of more than $3 trillion each.

Up until Thursday of last week, Nvidia 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.

As Yahoo Finance's Allie Canal recently reported, Wall Street is mixed on whether the recent selloff signals long-term concerns with the stock.

"The stock's steep climb makes it vulnerable to profit taking, but we argue any volatility [is] likely to be short-lived," Bank of America analysts stated in a note last week, reiterating a Buy rating and $150 price target while calling Nvidia a "top pick."

Over the weekend Jefferies analysts maintained a Buy rating on the stock and raised their price target to $150 from $135, calling Nvidia the "king and kingmaker."

Meanwhile Patrick Moorhead, Moor Insights & Strategy founder and CEO, told Yahoo Finance on Friday that investors should be watchful for signs a pullback is here to stay.

While he doesn't see the status quo of Nvidia's dominance changing over the next six to nine months, investors should focus on "the downstream profitability that people in the ecosystem are making or not making."

"These are the software companies like Adobe, Salesforce, SAP, and ServiceNow. Because if those enterprises and those consumers aren't paying more for these new AI features, then this whole gravy train comes to a screeching halt, like we saw in the internet bust," he explained.

Correction: A previous version of this article misstated Microsoft's and Apple's valuations as being in the billions. Both companies have market capitalizations above $3 trillion. We regret the error.

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

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