Nvidia Loses $400 Billion in Value, Making Bitcoin Look Stable

Nvidia’s Recent $400 Billion Wipeout Brings AI Stock Volatility Into Sharp Focus.

Editorial Team (ET)June 4, 2025

Nvidia Corporation, a titan in the artificial intelligence (AI) chipmaking industry, has experienced a dramatic loss of more than $400 billion in market value this week. The sharp decline has rattled investors and raised concerns about the overall health of the US economy. This volatility, driven by concerns over the AI trade, has cast a shadow over the company, making Bitcoin’s notorious swings look relatively tame.

Two Weeks of Chaos for Nvidia Stock

The tumble has been severe, with Nvidia’s stock losing roughly a fifth of its value over the past two weeks. Investors are reeling as the chipmaker’s volatility eclipses that of its peers, placing it at the forefront of market uncertainty. Over the past 30 days, Nvidia shares have fluctuated between $90.69 and $131.26, showcasing a level of volatility that has driven its 30-day realized volatility up to 80. To put that into perspective, Nvidia’s volatility is now four times that of Microsoft Corporation and double that of Bitcoin, which is widely considered one of the most volatile assets in the financial markets.

Even when compared to meme stocks like Donald Trump’s media company or Elon Musk’s Tesla Inc., Nvidia’s recent price swings make it a standout in terms of unpredictability.

What Triggered the Collapse?

Several factors have contributed to Nvidia’s dramatic fall. First, investor sentiment has been dented by concerns about the long-term sustainability of the AI trade. The excitement around AI, while justified by long-term potential, may have gotten ahead of itself, leading to exaggerated valuations that are now facing a painful correction.

One of the key moments in Nvidia’s decline was the tepid forecast for its highly anticipated Blackwell chip, which failed to meet the lofty expectations set by investors. This, combined with broader concerns about chipmakers, has eroded confidence in the stock.

To make matters worse, Nvidia is also facing legal challenges. The US Department of Justice has issued subpoenas as part of an ongoing antitrust probe, adding another layer of uncertainty for investors.

On top of that, Broadcom Inc., another key player in the chipmaking industry, delivered a disappointing sales forecast, further souring market sentiment toward the sector. The cumulative effect of these developments has contributed to Nvidia’s worst two-week stretch in two years.

Investor Reactions: Panic or Opportunity?

Despite the chaos, some investors see Nvidia’s tumble as an opportunity. The company has delivered stellar returns for its investors this year, even with the recent slide. Nvidia stock remains up more than 100% for the year, and the company has added around $1.3 trillion in market value since January. This impressive growth has led many on Wall Street to remain optimistic about Nvidia’s future, particularly as the demand for AI-related infrastructure shows no signs of slowing down.

Nvidia’s biggest customers, including Microsoft Corp., Meta Platforms Inc., Alphabet Inc., and Amazon.com Inc., have all affirmed their commitment to AI investment in recent earnings reports. These tech giants collectively account for over 40% of Nvidia’s revenue, according to data compiled by Bloomberg. Their continued spending on AI infrastructure is seen as a bullish sign for Nvidia’s long-term prospects.

Mixed Results in Nvidia’s Latest Earnings Report

Nvidia’s latest earnings report painted a mixed picture. On the one hand, the company’s revenue more than doubled, beating analyst expectations, and adjusted earnings also exceeded forecasts. On the other hand, Nvidia’s revenue forecast, while positive, failed to reach the upper end of estimates, leaving some market participants underwhelmed.

This has fueled concerns among skeptics who question whether the high valuations placed on AI companies can be sustained over the long term. The recent decline in Nvidia’s stock suggests that some investors are now reassessing their expectations for future AI spending.

What’s Next for Nvidia and the AI Trade?

As the AI industry evolves, Nvidia’s volatility is expected to persist. The company’s position at the forefront of AI hardware makes it a crucial player in the market, but its wild stock swings highlight the risks associated with investing in the AI trade. For money managers and long-term investors, the current downturn could be seen as an entry point.

Rhys Williams, chief strategist at Wayve Capital Management LLC, believes this moment may offer a buying opportunity for those looking to invest in AI-related stocks. “For a long-term investor, this is a good time to start picking away,” Williams said. “If somebody handed me new money today, I would be enthusiastically adding some AI-related stocks.”

Conclusion

Nvidia’s $400 billion tumble this week highlights the risks and rewards of investing in the AI trade. While the company has experienced significant volatility and faces several challenges, its long-term potential remains strong. Nvidia’s AI technology will continue to play a key role in the future of computing, and for investors willing to ride out the storm, the current market environment may present a unique buying opportunity.

However, the road ahead is uncertain. Investors will need to closely monitor developments in the AI sector, Nvidia’s legal challenges, and broader market conditions to navigate the volatility that is likely to persist in the coming months.

Nvidia

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