Nvidia Stock Craters in Historic $280 Billion Decline

The pendulum has swung: Nvidia lost nearly 10 percent of its value Tuesday, erasing almost $280 billion in value. It was the single biggest one-day market capitalization decline for a U.S. company in history.

The timing couldn’t be worse: Nvidia was just subpoenaed by the U.S. Department of Justice (DOJ) as part of an antitrust investigation into the firm’s business practices.

“Nvidia wins on merit, as reflected in our benchmark results and value to customers, who can choose whatever solution is best for them,” an Nvidia statement notes in a vague defense of the antitrust probe.

But Nvidia’s historic loss has more to do with the stock market than antitrust: In the wake of its most recent earnings announcement, the Wall Street consensus is that Nvidia’s era of hyper-growth is over. There’s no way for it to repeat the massive triple-digit revenue growth it maintained over the past year, and its financial comparables in the coming year, while still likely to be impressive, can’t measure up to last year. Worse, the AI boom that’s fueled Nvidia’s growth may be ending sooner than many had expected. And that could have a broader impact on the market.

For perspective, consider that Nvidia notched about $16 billion in revenues in 2020, while its 2024 revenues should land somewhere around $121 billion. This growth led to a market cap of over $3.1 trillion–this figure was $323 billion at the end of 2020–and a brief moment as the world’s most valuable company. But with yesterday’s losses, Nvidia’s market cap is now just $2.6 trillion, and it’s the third most valuable company.

Nvidia may take down big chunks of the market with it, too. The semiconductor firms that build the chips Nvidia designs, like TSMC, Foxconn, and Samsung, are now experiencing stock declines of their own. And it’s possible the losses will extend further, of course, and include others in the tech industry.