Nvidia, the AI chipmaking giant, experienced a significant downturn on Tuesday, with its share price falling 9.5%.
Nvidia shares nosedived by 9.5%, wiping out $279 billion in market value as Wall Street took a hit. After a remarkable rally earlier this year, the AI giant is facing investor skepticism amid tepid economic data and a market-wide selloff.https://t.co/1JDfzvdkwE
— People Matters (@PeopleMatters2) September 4, 2024
This decline wiped out $279 billion from the company’s value, surpassing the previous record loss set by Meta in 2022. The magnitude of this loss is staggering, as only 27 companies worldwide are worth as much as Nvidia lost in a single day.
An astonishing line in the penultimate paragraph of this piece:
“Nvidia is set to bring in more profit this year than the total sales of its nearest rival, Advanced Micro Devices.”https://t.co/h6iY333TrT
— David Gura (@davidgura) September 4, 2024
Nvidia CEO Jensen Huang, the company’s largest individual shareholder, saw his personal wealth diminish by $10 billion due to this plunge. Nvidia has been riding the AI hype wave, achieving a $3 trillion valuation that positioned it among tech giants like Apple and Microsoft. However, as the U.S. economy shows signs of stress, investors have grown skeptical of the sky-high valuations of Nvidia and other AI stocks.
The US Justice Department sent subpoenas to Nvidia & others as it seeks evidence the chipmaker violated antitrust laws
Nvidia shares fell 9.5%, wiping out $278.9 bn- the biggest loss of value ever for a US stock
**Now -14% since earningshttps://t.co/LQyL0F02nd via @technology— Joumanna Nasr Bercetche (@JoumannaTV) September 4, 2024
Much of Tuesday’s sharp decline was reportedly due to the U.S. Justice Department sending Nvidia a subpoena as part of an antitrust probe. The Department of Justice and Nvidia declined to comment directly on the investigation. The Biden administration has been intensely scrutinizing tech titans, launching probes and filing charges against companies like Apple, Google, and Amazon.
Nvidia’s market value plummets
It’s unclear whether a different administration would continue these cases. Despite the decline, AI bulls continue to have faith in Nvidia.
What goes up will ultimately come down….let's see if the media reports how much the CEO of Nvidia lost like they do @elonmusk when @Tesla falls….my Guess No.:)https://t.co/rew6Y2i2lr
— Peter Adderton (@peter_adderton) September 4, 2024
The stock remains up 118% this year and has a $2.7 trillion market valuation, placing it closely behind Apple and Microsoft. Huang stated last week that demand for its latest “Blackwell” AI chips “far exceeds its supply,” highlighting the growing demand for Nvidia’s chips even as competition intensifies. The impact of Nvidia’s decline extended to global semiconductor and associated stocks on Wednesday.
In South Korea, memory chip maker SK Hynix and conglomerate Samsung Electronics were affected, with Samsung shares closing 3.45% lower and SK Hynix dropping 8.5%. Japanese investment holding company SoftBank, which owns a stake in chip designer Arm, fell 7.7%. Contract chip manufacturer Taiwan Semiconductor Manufacturing Company (TSMC), which manufactures Nvidia’s high-performance graphics processing units (GPUs), declined more than 5%.
The selling in Asia also filtered through to European semiconductor stocks, with shares of ASML, which makes critical equipment to manufacture advanced chips, falling 5% in early trade.
