Nearly 2 Trillion Evaporated Overnight! Nvidia’s Stock Price Plummeted Nearly 10% on Tuesday

After a period of “explosive sales growth”, Nvidia, a chipmaker headquartered in Santa Clara, California, has more than doubled its stock price this year. However, according to a report on September 3, Nvidia’s stock price plummeted that day, falling by 9.53%, setting a record for the largest single-day drop in the market value of a US company, with a market value loss of up to 278.9 billion US dollars.

Against the backdrop of weak economic data and the overall market sell-off, this has become an important sign that investors’ optimism about AI has cooled, indicating that they have become more cautious in the face of emerging AI technologies that have driven the stock market up this year.

As the world’s leading semiconductor company, Nvidia has always occupied a pivotal position in the field of technology. Its outstanding performance in graphics processing chips, AI computing and other fields has made the company a target of many investors. Since the beginning of this year, Nvidia’s stock price has experienced two rounds of rapid increases. On June 5, Nvidia’s market value exceeded $3 trillion, surpassing Apple’s market value. On June 18, Nvidia’s market value reached $3.34 trillion, surpassing Microsoft to become the highest-valued US listed company. Media analysis believes that the rapid growth in demand for AI chips and its leading position in the industry have led to explosive growth in Nvidia’s performance in the past two years and driven investors to continue buying.

However, Nvidia has recently encountered the dilemma of a series of market value declines. On August 7, its market value plummeted by $130.38 billion; then, on August 29, its market value evaporated again, with a loss of up to $197.1 billion. Today, Nvidia’s market value has set a new record for a single-day decline. On September 3 alone, its market value was reduced by $278.9 billion. The sudden plunge in stock prices shocked the entire market.

Immediately afterwards, the US Department of Justice issued subpoenas to it and several related companies, explicitly requesting the submission of conclusive evidence of Nvidia’s suspected violation of antitrust laws. This move marks a further escalation of the investigation into the tech giant, which dominates the field of artificial intelligence computing, and indicates that the US government is one step closer to formally filing a lawsuit. Influenced by this news, Nvidia’s stock price continued to decline in after-hours trading in the US stock market, falling another 2% on the basis of the previous plunge of 9.53%.

There are multiple factors behind the sudden drop in Nvidia’s market value. First, Nvidia’s leading position in the graphics processing unit (GPU) market has been challenged by competitors, and the fierce market competition has made the competition for market share more intense. On the other hand, some controversies over Nvidia’s sales strategy have also caused dissatisfaction among the market and consumers. These dissatisfactions have further fermented and become another important driving force for the continued decline in its stock price.

Secondly, although Nvidia’s own financial report performance was solid, it did not meet the market’s high expectations for its performance. The company achieved revenue of $30.04 billion during the reporting period, an increase of 122% year-on-year. Although this figure is higher than market expectations, the company’s sales forecast for the third quarter of fiscal year 2025 is $32.5 billion, with a fluctuation range of 2%. Behind these seemingly impressive results, Nvidia had to postpone the mass production plan of its latest chip Blackwell to the fourth quarter of this year due to defects in mask design. This change has once again aroused the market’s attention to the sustainability of huge investments in the field of AI hardware.

In addition, the market has doubts about the long-term sustainability of huge capital investment in the field of AI computing hardware. In the past two years, benefiting from the rise of generative AI, Nvidia’s market value has continuously exceeded 1 trillion, 2 trillion and 3 trillion US dollars in a short period of time, and once topped the throne of the world’s highest market value company. The market has given it an astonishing valuation based on its optimistic expectations for the explosive growth of this round of generative AI and its recognition of Nvidia’s leading position in the market. However, the reality presents a different picture. Although technology giants such as Microsoft and Alphabet have invested heavily in the field of AI, the revenue growth it has brought is relatively mild and has not fully matched the high expectations of the market. At present, the added value created by generative AI has not been substantially reflected in the financial reports, and the “AI arms race” between large companies is still in full swing.

Even more striking is that as a leading startup, OpenAI has repeatedly postponed the release of its next-generation large model, and the frequent changes in its internal management have also aroused widespread doubts from the outside world. These factors combined have raised deep concerns about the sustainability of such large-scale investments in AI and its ability to maintain its current strong momentum.

Overall, Nvidia’s plunge in market value is a microcosm of the general market setback and reflects the instability and uncertainty of the technology stock market. Although Nvidia has encountered significant challenges and setbacks in the short term, its solid position as the world’s top chip manufacturer has not been shaken. With the prosperity of key markets such as AI, cloud computing, and data centers, Nvidia’s innovation and market influence in the GPU field still have great development potential. In view of this, Nvidia remains a company worth paying attention to for investors seeking long-term returns.