Nvidia, the tech giant, is facing hard times. After a dizzying rise, it has taken a stunning fall. The company’s market cap suddenly plummeted. According to the Financial Times, Nvidia's market cap tumbled by $550 billion in just three trading days.
The former most valuable company in the world saw its value shrink by $550 billion in a short span. On Monday, June 24th, its market cap fell from a peak of $3.46 trillion to $2.905 trillion. Experts estimate that Nvidia's stock price fell by 16% during this period, with a total drop of $430 billion over the three trading days. This is the largest three-day decline on record.
This bad example set by the American chip maker negatively impacted other companies in the sector. This week, Broadcom's shares have dropped by 4%, Qualcomm's by 5.5%, ARM's by 5.8%, and Taiwan Semiconductor Manufacturing Company by 3.5%.
Nvidia's fall is even more dramatic considering that just a week earlier, it had managed to surpass giants like Microsoft and Apple. These firms have been leading the market since 2019, sometimes swapping places at the top. Recently, Nvidia overtook them, with its stock price soaring by a hefty 140% since the start of the year.
A possible catalyst for the drop was the news that Jensen Huang, Nvidia's CEO, sold shares worth $95 million. At that time, the company's stock was near or at its peak. It is worth noting that this sale was no surprise, as it was part of a trading plan approved in March 2024. Such plans allow company members to avoid accusations of insider trading.
Analysts believe Nvidia has been one of the main beneficiaries of the AI revolution. The reason is that OpenAI, the creator of the popular ChatGPT, uses Nvidia’s graphics processors for most of its developments.
