Nvidia lost approximately $430 billion (about 627 trillion won) in market capitalization over two days as concerns about alleged Chinese espionage involving CEO Jensen Huang and anxiety over the profitability of AI investments compounded. Following its sharp stock-price decline, which ceded the world's No. 2 market capitalization ranking to Microsoft (MS), AI-related companies also fell, increasing market instability.
Reuters reported on the 10th (local time) that Nvidia's stock price fell about 9.5% over two days. After dropping 4.3% on the 9th, it fell 5.47% on the 10th as well.
Its market capitalization briefly fell below $4 trillion during trading, while MS overtook Nvidia to take the world's No. 2 market capitalization ranking. It was the first time the two companies had exchanged rankings since June 2025.
Nvidia's sharp decline was driven not only by management uncertainty surrounding Huang but also by broader unease about AI investment. U.S. inflation data released that day came in above expectations, increasing the likelihood of additional interest-rate hikes by the Federal Reserve (Fed), while raising questions about the profitability of AI infrastructure companies that require massive capital investment.
Selling continued across AI-related stocks. According to Reuters' midday tally, Dell fell 4.8% and SanDisk fell 4.5%. IREN, an AI data-center and cloud infrastructure company, fell 10%, while Nebius fell 7% and CoreWeave fell 3%. The shares of all three companies have declined more than 40% since the Nasdaq index recorded a recent high on October 6.
Uncertainty surrounding AI infrastructure investment plans also dampened investor sentiment. Reports emerged that the U.K. cloud company Nscale may postpone a $35 billion IPO, while SoftBank revised its equipment procurement plans for a U.S. data-center project, sending the shares of power-equipment maker GE Vernova down more than 6% during trading.
Market views of Nvidia's stock-price decline are divided. Team Griskey, chief portfolio strategist at investment firm Angels & Sniders, identified the possibility of replacing Huang as CEO and the issue of finding a successor as investors' primary concerns, while assessing that there were no major problems with Nvidia's competitive strength. He said he viewed the share-price declines in Nvidia and other major AI companies as buying opportunities.
Some investors remain optimistic about the AI industry's long-term growth outlook. Jason Ware, chief investment officer at Albion Financial Group, recently emphasized that although share-price volatility has increased, corporate earnings will determine the market's direction going forward. The analysis indicated that corporate profits may increase next year unless AI capital spending drops sharply or a recession occurs.
Investors' attention is therefore shifting toward Nvidia's earnings announcement scheduled for next week. As investigations involving Huang continue, AI semiconductor demand and the earnings outlook are expected to be the key variables determining whether confidence in the company's growth can be maintained and, in turn, the direction of its stock price.
Reporter Park Chan cpark@aitimes.com
