Nvidia’s shares have fallen 16% since Thursday, ending its brief stint as the world’s most valuable company last week.
Nvidia has lost over $500 billion in market value following a significant drop in its share price. On Monday, Nvidia’s shares fell almost 7%, bringing its market value down to $2.91 trillion, a steep decline of roughly $550 billion from its peak on Thursday. The chipmaker had recently surpassed Microsoft and Apple to become the world’s most valuable publicly listed company but has since dropped back to third place.
Nvidia’s remarkable gains had contributed significantly to the S&P 500’s rise in 2024, accounting for about a third of the index’s increase. However, the company’s shares are now down about 16% from their intraday high of $140.76 reached last Thursday.
Concerns have been growing about Nvidia’s impact on the broader market. The company’s nearly 140% climb in 2024 has led some analysts to warn that a major sell-off could trigger a broader market slump. Barry Bannister, chief equity strategist at Stifel, noted, “If Nvidia corrects pretty hard in the coming months it becomes very difficult for the [S&P 500] to keep rising,” adding that Nvidia’s strong earnings growth might decelerate.
Monday’s decline followed disclosures that Nvidia’s CEO and co-founder, Jensen Huang, sold almost $95 million worth of shares around the time Nvidia became the world’s most valuable company. These trades were part of a pre-arranged Rule 10b5-1 sale plan established in March, according to filings.
The rapid rise in Nvidia’s stock has drawn comparisons to Cisco, which briefly became the world’s most valuable company during the dot-com boom in March 2000, only to lose about 80% of its value in the following year as the bubble burst.
Nvidia’s recent downturn has also affected the broader chipmaking sector. The PHLX Semiconductor Index has dropped almost 7% over the past three trading sessions. The tech-heavy Nasdaq Composite fell 1.1% on Monday.
Nvidia’s slide weighed on the wider stock market, causing the blue-chip S&P 500 to close 0.3% lower despite gains in most sectors. In contrast, the small-cap Russell 2000 index, which has underperformed large-cap indices in recent months, rose 0.4%.
