Nvidia’s stock took a major hit on Tuesday, dropping nearly 10% in one day. This caused the company to lose a staggering $279 billion in market value, marking the biggest single-day loss ever for a U.S. company. The drop shows that investors are becoming less confident in the AI boom that has driven much of this year’s stock market surge.
After reporting earnings that didn’t meet high expectations, Nvidia’s stock has fallen 14% over the last three days. The stock had almost tripled in value by July 2024, but with this recent drop, it’s still up 118% for the year.
This one-day loss in market value for Nvidia surpasses the $232 billion drop that Facebook’s parent company, Meta, experienced in February 2022 after issuing a bleak forecast.
Despite the dip, analysts have raised their profit estimates for Nvidia, expecting it to earn $70.35 billion by January 2025. However, with the stock’s recent decline, Nvidia is now trading at 34 times its expected earnings, down from over 40 times in June.
The selloff wasn’t just limited to Nvidia; other tech stocks also took a hit. The PHLX chip index, which tracks chipmakers, dropped 7.75%—its biggest single-day fall since 2020. The broader market also suffered, with the Nasdaq falling 3.3% and the S&P 500 down 2.1%.
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