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Nvidia Stock Endures $277 Billion Midday Selloff As AI Giant Falls Behind Microsoft

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5 months ago

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Nvidia Stock Endures 7 Billion Midday Selloff As AI Giant Falls Behind Microsoft

Topline

Nvidia stock suffered a rare tumble Thursday, relinquishing the artificial intelligence motor’s briefly held title as the most valuable public company on the planet and exhibiting broader stock indexes’ sensitivity to price movements from Nvidia.

Key Facts

Nvidia’s stock sank by as much as 8% from its early morning all-time high to its afternoon nadir, with its share price down 3.5% on the day to $131 by close, reversing what was as much as a 4% gain shortly after Thursday’s open.

The intraday swing erased $277 billion of Nvidia’s market value, which sank to $3.27 trillion, placing Nvidia behind MIcrosoft after exceeding the market capitalization of the more established technology firm Tuesday.

There was no clear catalyst for the Nvidia selloff, indicating it was likely a matter of investors taking profits after the stock’s 170% rally year-to-date and 800% pop since the beginning of last year.

Nvidia stock is still up 40% over the last month alone.

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Why Are Stocks Down Today?

Critically, the Thursday dip demonstrated the broader market’s sensitivity to Nvidia stock’s performance, as the S&P 500 turned its peak 0.3% morning gain to a 0.6% loss by around 1:45 p.m., with almost all of the fall explained by Nvidia. Essentially, Nvidia’s intraday slide erased the equivalent of Coca-Cola, the S&P’s 27th most valuable company with a roughly $270 billion market cap, from the index.

Key Background

It is highly normal for a stock to decline after a sharp increase like Nvidia just had. Broad index funds have benefited far more from Nvidia’s inclusion than they’ve been hurt, with Nvidia’s $2 trillion market cap added in 2024 accounting for a third of the market cap-weighted S&P’s 15% year-to-date gain. Nvidia, which produces a majority of the semiconductor technology most coveted for generative AI applications, reported a sixfold increase in earnings in its most recent quarter as customers like Microsoft and Google shell out for the technology.

Big Number

$345,000. That’s about how much $10,000 invested in Nvidia exactly five years ago would be worth today. The same amount invested in the S&P would be worth about $20,150.

Further Reading

ForbesNvidia-World’s Most Valuable Company-Rallies Another 3% As $4 Trillion Valuation In SightBy Derek Saul
ForbesThese 10 Nvidia Shareholders Have Gotten $36 Billion Richer In A MonthBy Phoebe Liu

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