Nvidia shares plunge 6%, wiping out $1.7 trillion in market value since all-time high

Nvidia shares extended their decline on Tuesday, November 10, falling more than 6% as mounting questions over CEO Jensen Huang’s alleged links to a Chinese intelligence operation added to investor concerns about the artificial intelligence (AI) industry. The sell-off erased hundreds of billions of dollars in the chipmaker’s market value over two trading sessions and pushed it below Microsoft in the global market-capitalisation rankings.

Nvidia shares fell 6.5% to around $167.11 on Tuesday, extending Monday’s 4.3% decline. The stock’s two-day slide has put the company on track to lose more than $470 billion in market capitalisation.

However, the broader decline predates the controversy. Nvidia's shares hit an all-time closing high of $243.37 on October 6, when its market capitalisation stood at approximately $5.79 trillion. By November 10, its valuation had fallen to around $4.08 trillion, representing an erosion of roughly $1.71 trillion, or nearly 30%, from its peak. The correction reflects a combination of concerns over elevated AI valuations, questions about the returns on massive AI infrastructure investments and, more recently, uncertainty surrounding Huang's leadership and the company's China-related exposure.

Microsoft, meanwhile, overtook Nvidia on Tuesday to become the world’s second-most valuable publicly traded company, behind Apple. Microsoft shares slipped 0.4% to $543.25.

Nasdaq falls as inflation concerns add to pressure on technology stocks

The weakness was not limited to Nvidia. The Nasdaq Composite fell 0.7% to close at 25,065.87 on Tuesday, while the S&P 500 declined 0.4% to 7,520.93 and the Dow Jones Industrial Average slipped 0.3% to 52,231.89.

The broader sell-off came after US inflation data came in hotter than expected, strengthening bets that the Federal Reserve could raise interest rates again in December. The Consumer Price Index (CPI) rose 0.4% in October, against economists’ expectations of a 0.3% increase. Core inflation, which excludes food and energy, also rose 0.3%, above the 0.2% forecast.

Comments from Federal Reserve Governor Christopher Waller added to concerns about further monetary tightening. He indicated that a larger, half-percentage-point rate increase could be considered if inflation remained elevated.

Technology stocks bore the brunt of the pressure, with investors reassessing valuations across the AI ecosystem. Nvidia fell alongside other companies that have benefited from the AI infrastructure boom. Dell Technologies declined 4.8%, while chipmaker SanDisk lost 4.5%. AI infrastructure companies Iren and Nebius also fell 10% and 7%, respectively.

The market’s concerns extended beyond Nvidia’s leadership crisis. Investors have increasingly questioned whether the massive investments in AI infrastructure will generate adequate returns, particularly as borrowing costs remain elevated. The developments came even as Anthropic’s steps towards a potential large public listing failed to ease concerns surrounding the sector.

Huang loses billions, falls out of world’s 10 richest

The sell-off has had a direct impact on Huang’s personal wealth. Huang lost another $8.6 billion on Tuesday, taking his estimated net worth to $146.8 billion. He dropped to the 12th position on the list, falling out of the world’s 10 richest people.

The losses followed an estimated $7.4 billion decline in his wealth on Monday. Huang owns approximately 3.6% of Nvidia, including shares held through family trusts, making the company’s market performance a significant determinant of his personal fortune.