Nvidia's market value evaporated by over 1.7 trillion yuan overnight, and AI leader faces capital cold treatment

Nvidia, a tech giant soaring with the AI boom, saw its stock price plummet by over 5% on the same day, marking the largest single day drop since April 16th last year. Its market value evaporated by $259.3 billion overnight, equivalent to RMB 1773.9 billion, which is equivalent to the annual GDP of a medium-sized city, attracting widespread attention from global capital markets.

The closing data of the US stock market on that day showed a differentiated pattern of "two declines and one rise" among the three major indexes: the Nasdaq Composite Index fell 1.18%, significantly dragged down by the collective weakness of technology stocks; The S&P 500 index fell slightly by 0.54%, continuing its recent volatile trend; The Dow Jones Industrial Average rose slightly by 0.03% against the trend, becoming the only index among the three major indexes to close red. From the perspective of sector performance, most large technology stocks have fallen under pressure, except for Nvidia, Tesla fell more than 2%, Google A and Amazon fell more than 1%, Apple fell slightly, only a few stocks such as Netflix and Microsoft rose against the trend, and the differentiation trend of the technology sector has become increasingly evident.

As the core of this market volatility, Nvidia's sharp decline is particularly surprising. It should be noted that just the day before (February 25th), Nvidia had just released its unexpected fourth quarter financial report for the 2026 fiscal year. The data showed that its revenue for the quarter reached $68.1 billion, a significant increase of 73% year-on-year, far exceeding the market expectation of $65.684 billion; Meanwhile, the company expects its revenue for the first quarter of fiscal year 2027 to reach $76.44 billion to $79.56 billion, which is also higher than the market estimate of $72.78 billion, demonstrating strong business growth momentum. However, it is puzzling that this impressive financial report did not translate into stock price momentum, but instead triggered a wave of profit taking among investors, ultimately leading to a significant drop in stock prices.

Analysts point out that the sharp decline in Nvidia's stock price is essentially the result of a combination of multiple factors. On the one hand, after the previous continuous rise, Nvidia's stock price has accumulated a large number of profit opportunities. After the favorable performance landed, it became inevitable for funds to choose profit taking. This kind of market reaction of "all the good news out" is not uncommon among high-level technology stocks. On the other hand, market concerns about the AI industry are heating up. Michael Bury, the "big bear," recently issued a public warning that Nvidia's current procurement commitment is as high as $95.2 billion, a significant increase from $16.1 billion a year ago. If there are fluctuations in AI demand in the future, it could have a "catastrophic" impact on the company's financial situation, further exacerbating investors' panic.

In addition, market concerns about Nvidia's "narrowing moat" are gradually emerging. With the rapid development of AI technology, ultra large scale cloud service providers such as Google and Amazon are promoting self-developed chips, while competitors such as AMD are accelerating their layout in the AI chip field, leading to increasingly fierce market competition. Analysts have expressed concerns that Nvidia may not be able to maintain its current high growth trend in the long term, especially during the transition period from AI training to inference. There is still uncertainty about whether the company can continue to dominate the market.