Nvidia shares dropped 9.5% on Tuesday, which wiped out $279 billion in market capitalization, marking the largest single-day decline in market value for a US company.
This drop reflects growing investor caution about AI technology amid a broader market selloff and disappointing economic data. Nvidia’s quarterly forecast fell short of high expectations, contributing to the downturn. Nvidia’s loss is the largest ever recorded in a single session, surpassing Meta Platforms’ $232 billion drop in February 2022. Despite the recent decline, Nvidia’s stock is still up 118% for the year.
Additionally, Intel fell nearly 9% following reports of a major restructuring plan. Concerns about the long-term returns from AI investments have also impacted shares of other tech giants like Microsoft and Alphabet.
Tuesday’s market decline was part of a broader downturn, with the Nasdaq dropping 3.3% and the S&P 500 down 2.1%. The Federal Reserve is expected to cut interest rates, but there are mixed expectations about the magnitude of the cut.
