Nvidia shares plunged over 8% on Thursday, wiping out approximately $273 billion in value and pushing the company’s market capitalization below the $3 trillion mark. The stock decline came on the heels of its latest quarterly earnings report, which exceeded analyst expectations but failed to address broader market concerns. The Nasdaq dropped 2.8%, while the S&P 500 fell 1.6% in the broader sell-off.
Nvidia Remains the Second Largest U.S. Tech Company
Despite the slide, Nvidia maintains its position as the second most valuable U.S. technology company, sitting behind Apple but still ahead of Microsoft. The stock has erased 10% of its gains in 2025, with investors reacting to regulatory risks, export controls, and an evolving AI landscape.
AI and Growth Challenges Create Investor Anxiety
The company has significantly benefited from the surge in demand for AI-driven semiconductor technology. However, investor sentiment is being challenged by concerns over potential export restrictions, tariff implications, and the increasing efficiency of next-generation AI models, which could moderate demand for Nvidia’s premium chips.
Record Earnings Still Signal Strength
Wednesday’s earnings report showcased a 78% revenue growth year-over-year, reaching $39.33 billion. Data center sales, which drive Nvidia’s AI processing business, surged 93% annually to nearly $36 billion, reflecting robust enterprise and cloud adoption.
CEO Jensen Huang recently assured that the upcoming Blackwell chip shipments remain on schedule, alleviating some fears about production constraints. He emphasized that AI workloads will continue growing as the industry shifts to more sophisticated computational processes that require substantially higher processing power.
Cloud Giants Drive Nvidia’s Revenue
Nvidia heavily relies on major cloud service providers such as Microsoft, Google, and Amazon, which collectively account for nearly half of its data center revenue. The sustained demand from these firms will be crucial in determining the company’s trajectory in the coming months.
While Nvidia’s recent stock dip raises short-term concerns, its foothold in advancing AI technology and accelerated computing remains strong, leaving room for potential recovery as market conditions stabilize.
