Nvidia's stock experienced a strong rebound on Tuesday, surging nearly 7% after a three-session tailspin that wiped off approximately $430 billion from the artificial intelligence chipmaker's market value. The company's shares closed at $126.09, recovering from a downturn that saw them lose around 13% since their June 18 closing price of $135.58. The decline came after a rally, which gained momentum following a 10-for-1 stock split that took effect on June 10.

Experts attribute the bounce in Nvidia's stock to be a regular technical rebound after a significant 15% drop over the course of three days. Tom Hayes, Chairman at Great Hill Capital in New York, noted that Nvidia is a great company with a great CEO. He also mentioned that insiders sold approximately three-quarters of a billion worth of stock just as retail investors were engaging with the stock split.

Nvidia's impressive rise and its position as a leading provider of chips supporting artificial intelligence applications have made it a symbol of this year's tech-driven surge in U.S. stocks. Throughout the year, the company's shares have soared by 154%, accounting for nearly 30% of the S&P 500's year-to-date return as of Monday's market close, according to S&P Dow Jones Indices. The index itself has risen by 14.6% this year.

The recent selloff in Nvidia's stock has alleviated some concerns about its valuation, which currently stands at around $3.1 trillion compared to its high of approximately $3.3 trillion earlier this month. Tom Plumb, CEO and portfolio manager at Plumb Funds, one of Nvidia's major shareholders, believes that the recent dip is a normal correction for a company that has gained significant attention and publicity. He believes that until there is confirmation regarding the company's actual business justifying the deceleration of its momentum, the all-time peak has not been reached.

The options market reflects continued bullish sentiment towards Nvidia, although the recent decline in stock price has made traders more cautious. Trade Alert data shows that Nvidia call options, used to bet on a rising stock price, have outnumbered puts by 1.4-to-1 in the last three trading sessions. This compares to a call-to-put ratio of 1.6-to-1 over the previous 10 sessions.

While short sellers have profited $4.97 billion in the past three sessions as they bet on declines in Nvidia stock, retail investors are likely taking advantage of the recent dip to increase their holdings, according to Mario Iachini, Senior Vice President of Vanda Research, an organization tracking the behavior of individual investors.

Overall, Nvidia's strong rebound reflects the resilience and confidence in the company's prospects despite the recent market fluctuations. As it continues to dominate the artificial intelligence chip industry, investors eagerly await further developments and milestones for the tech giant.