Nvidia isn't just breaking records on the upside – it’s also made history for the wrong reasons. No other publicly traded company has ever lost more value in a single trading session.
On Tuesday, Nvidia stock dropped 9.53% as investors grew skeptical about the company's AI prospects. This resulted in a $279 billion decline in Nvidia’s market capitalization, the largest single-day loss ever for a U.S. company. This surpasses even Meta’s worst day, when it lost $200 billion after Mark Zuckerberg spooked investors with spending guidance in April this year. Going back further, Meta lost $232 billion on February 3, 2022.
Nvidia’s shares have been on a downward trend over the past week, delivering a negative 14% return over a five-day period.
Despite being a former $3 trillion heavyweight, Nvidia has become synonymous with meme stocks due to its extreme price fluctuations. The chip giant has struggled to recover after a disappointing earnings report – though it exceeded expectations for top-line growth, it fell short of Wall Street’s highest expectations. Production delays for the company’s next-generation Blackwell chips further weighed down its stock.
This latest slide in Nvidia’s shares came after a Reuters report indicated that CEO Pat Gelsinger and key executives are expected to present a plan to the company’s board of directors to cut unnecessary businesses and revamp capital spending at the struggling chipmaker.
Concerns about slow returns on large AI investments have troubled Wall Street’s most valuable companies in recent weeks, with shares of Microsoft and Alphabet trading lower after their quarterly reports in July.
At its record-high close in July, Nvidia stock had nearly tripled in 2024. However, with yesterday’s close at $108 a share – placing it among the worst performers in the S&P 500 for the day – the stock is now up only 118% year-to-date.
