Nvidia experiences a decline of over 10% from its all-time high close.

On Monday, the AI chip darling's stock price dropped more than 2%, officially placing it in correction territory.

Despite a 165% increase in the chipmaker and de facto artificial intelligence trade this year, the stock has recently faced a sluggish stretch, with shares down 5% in December and officially in correction territory, sitting about 12% off their closing high of $148.88 reached last month.

A market correction is typically viewed as a decline of 10% or more from the highest point reached.

The recent underperformance of Nvidia could indicate profit-taking on Wall Street after another successful year. As the manufacturer of graphics processing units that power large language models, Nvidia has experienced increased demand from datacenters since the launch of ChatGPT in late 2022.

The market leader and fundamental player among the three major averages have some concerns, as Nvidia underperforms. If the pattern continues, Roth MKM warns that the $125 to $130 level is a key test for the stock and the overall market.

Despite Nvidia's struggles, other chipmaking stocks have performed well, with Power surging to new highs. The stock increased by approximately 8% during Monday's trading session.