NEW YORK (Reuters) -Shares of Nvidia surged nearly 7% on Tuesday, snapping out of a three-session tailspin that had erased about $430 billion from the artificial intelligence chipmaker's market value.

Nvidia's shares finished at $126.09, after a tumble that saw them lose around 13% from their June 18 close of $135.58. The drop followed a rally that accelerated after a 10-for-1 stock split that took effect on June 10.

"The bounce today is a normal technical bounce after a 15% drop in three days; you're not going to go straight down every single day," said Tom Hayes, chairman at Great Hill Capital in New York. "It's a great company, it's a great CEO, and you have insiders selling three-quarters of a billion worth of stock just as retail investors were getting involved with the split," Hayes added.

Nvidia's breathtaking rise and its position as the dominant provider of chips to support artificial intelligence applications have made it emblematic of this year's tech-driven boom in U.S. stocks.

Shares of Nvidia, which last week briefly became the world's most valuable company, are up 154% this year and have accounted for nearly 30% of the S&P 500's year-to-date return as of Monday's close, according to S&P Dow Jones Indices. The index is up 14.6% this year.

The recent selloff helped ease some worries about Nvidia's valuation, which now stands at about $3.1 trillion from a high of about $3.3 trillion earlier this month.

"It's a normal correction for a company that has made a run and gotten a lot of publicity," said Tom Plumb, chief executive and portfolio manager at Plumb Funds, which has Nvidia as one of its largest holdings. "Until there's a confirmation that the actual business would justify the slowing of the momentum, I don't think you've reached the all-time peak."

Bullishness on Nvidia was evident in the options market, though the stock's recent share price slide appears to have made traders more cautious.

Nvidia call options, typically used to bet on a rising stock price, outnumbered puts by 1.4-to-1 over the last three sessions, Trade Alert data showed. That compared to a call-to-put ratio of 1.6-to-1 for the prior 10 sessions.

At the same time, Nvidia short sellers, who bet on declines in the stock, have gained $4.97 billion in the past three sessions combined, according to data analytics firm Ortex Technologies.

Meanwhile, retail investors have likely been buyers of the stock on the recent dip, said Mario Iachini, senior vice president of Vanda Research, which tracks the behavior of individual investors.