Nvidia Faces $600 Billion Market Cap Loss During AI Market Crash

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Nvidia has suffered the largest single-day market capitalization loss in stock market history, shedding over $600 billion in value.

Nvidia's chips look so expensive now

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On Thursday, the company’s stock traded above $147 per share, making Nvidia the world’s most valuable company with a market cap of approximately $3.5 trillion. However, the stock has plummeted to $118.20 per share today, bringing its total valuation down to $2.9 trillion.

The drastic decline was fueled by a broad market sell-off, exacerbated by the US White House administration’s newly imposed tariffs on Colombia, which have dampened investor sentiment. Nvidia shares opened 12% lower and continued to slide, ultimately falling nearly 17% during today’s session.

Nvidia Chart Daily – MAs Have been BrokenChart NVDAm, D1, 2025.01.27 19:07 UTC, Exness Technologies Ltd, MetaTrader 5, Real

AI Competition and Market Concerns

A significant factor behind Nvidia’s sharp decline is growing competition in the artificial intelligence sector. Chinese tech firm DeepSeek has introduced an AI model comparable to OpenAI’s ChatGPT but at a fraction of the cost. Unlike its competitors, DeepSeek does not rely on the latest H100 Nvidia chips, reducing development and operational expenses to just 3% of what was previously assumed necessary. This revelation has raised concerns that AI development may not require as many high-end chips, which could severely impact Nvidia’s long-term revenue prospects. While some remain skeptical about the cost claims, the potential shift in demand for Nvidia’s products has sent shockwaves through the market.

Impact on Nvidia Stock and Broader Markets

Nvidia’s massive sell-off has weighed heavily on the broader US stock market, particularly the Nasdaq ( NAS100 ), which is down 3.7% in futures trading. The sudden shift in momentum has triggered widespread uncertainty, with many investors opting to liquidate positions before reassessing market conditions. The current downturn raises questions about whether the AI-driven stock rally has reached its peak, or if the recent price action is a temporary setback in an otherwise bullish trend.

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Skerdian Meta
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Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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